The  Primary  Industries  and  Commodities  Minister  said  that  the  B7 biodiesel mandate will be implemented in stages, from 1 November for Peninsular Malaysia and by December for Sabah, Sarawak and Labuan. Peninsular  Malaysia  has  completed  the  B5  mandate  while  East Malaysia is close to completion. He added that full implementation of the B7 mandate will see the consumption of 575,000 MT of biodiesel. The government is also considering the possibility of moving higher to B10. (Source: The Edge Financial Daily)

Comments:  It is positive that full implementation of the B5 mandate will be  achieved  by  November,  a  dateline  extended  from  July  this  year. Based  on  the  stated  rollout  dates  for  Peninsular  and  East  Malaysia, Malaysia is on target to achieve full implementation of the B7 mandate by  mid-2015.  With  exports  growth  still  weak,  we  continue  to  expect biodiesel demand (also in Indonesia) and the exemption of export duties until  December to help lower inventory and support CPO prices. CPO production  may  have  also  peaked  earlier  in  August.  We  maintain  our NEUTRAL weighting for the Plantation sector.

Source: Affin Hwang Capital Research - 29 Oct 2014