• In the 2022 YTD, Malaysian Crude Palm Oil Futures have rallied 17% to MYR 5,500/MT, following a 30% rally in 2021. Gains have extended to Singapore-listed non-cyclical consumer stocks that maintain upstream palm oil production activities. Golden Agri-Res, First Resources, Bumitama Agri have averaged 17% YTD returns.
   
• The 2022 YTD has also seen Indonesia require permits for palm oil exporters, with producers to set aside 20% of planned export volumes for a mandatory domestic sale and Malaysia palm oil stockpiles declining on tight labour conditions following the 2021 border restrictions.
   
• Olam Intl is currently the largest stock of the STI Reserve List and 21st largest stock of the FTSE ST All-Share Index. It will release its FY21 (ended 31 Dec) results before the 28 Feb open.

In the 2022 YTD, Malaysian Crude Palm Oil (CPO) Futures have rallied 17% to MYR 5,500/MT, following a 30% rally in 2021. The decline in global output continuing into early 2022 has seen Indonesia requiring permits for palm oil exports, with producers to set aside 20% of planned export volumes for a mandatory domestic sale, while the world biggest importer of crude palm oil, India, is cutting taxes on crude palm oil imports to help refiners and consumers. Meanwhile, Malaysia palm oil stockpiles have continued to tighten amid recent flooding.

Aside from the supply chain factors pertaining to 2021, the Council of Palm Oil Producing Countries maintains there has been structural changes in the global palm oil supply due to a slowdown in new plantings throughout Indonesia and Malaysia since 2015. The majority of global CPO production is located in Indonesia and Malaysia, while India and China, Europe and the United States are among the biggest importers. Palm Oil is used for food and industrial products across the world and also used for bioenergy.

Golden Agri-Resources has added 14% its 60% gain in 2021, First Resources has added 20% to its 21% gain in 2021 and Bumitama Agri has added 18% to its 11% gain in 2021. Together with Wilmar International and Olam International the five most traded Agri and Food Ingredient Plays have averaged 13% gains in the 2022 YTD, outpacing the STI’s 10% gain.

 * For upstream origination, Wilmar Intl maintains oil palm plantation (FFB 4.0 MT in FY20) and sugar milling (Volume 3.5 MT in FY20), which include the cultivation and milling. **Olam Palm Gabon is the largest RSPO-certified palm plantation in Africa. Source: SGX, Refinitiv, Bloomberg (Data as of 16 Feb 2022)

Olam International has added 1% to its 24% gain in 2021, with the Group maintaining that the proposed demerger of Olam International is expected to enhance value by streamlining the group's portfolio and improve its overall financial position, as reported by the Business Times.  Ahead of the scheme meeting and extraordinary meeting scheduled for 18 Feb, Olam International filed  Responses to Substantial and Relevant Questions from Shareholders on 12 Feb.

Olam International is also scheduled to release its FY21 (ended 31 Dec) results before the 28 Feb open. For its 1HFY21, the Group reported its strongest operational PATMI since inception as it moved forward with its Re-organisation Plan, announced in Jan 2020. Olam International’s value chain spans over 60 countries and includes farming, processing and distribution operations, as well as a sourcing network of an estimated 5.0 million farmers. Olam Group has been re-organised into two new operating groups Olam Food Ingredients and Olam Global Agri with the Company Olam International as parent holding the two groups until carve-out, IPO and demergers associated with the Re-organisation Plan are completed.

Olam International is currently the largest stock of the STI Reserve List by market capitalisation and also ranks 21st largest stock of the FTSE ST All-Share Index. Note that a stock will be inserted into the STI at the quarterly review if it rises to 20th position or above when the eligible securities are ranked by full market capitalisation (before the application of any investability weightings). The full STI Ground Rules can be found here.