Hi guys,

Quite a number of dear people whataspped to ask about 8% CPO tax today

So this is a sharing on my thoughts

Ok this is the news posted in Theedgedaily

KUALA LUMPUR (Dec 22): Malaysia has set the export tax for crude palm oil (CPO) at 8% for January 2021.

In a statement today, the Royal Malaysian Customs Department said the 8% export duty rate was set after the CPO market price reached RM3,450 per tonne and above.

The rate would be effective on Jan 1 until Jan 31, 2021, marking the end of the zero export tax enjoyed from June to December 2020, which was aimed at raising the value of Malaysian palm exports to other countries, mainly India.

The export duty exemption was also meant to help support the commodity industry as part of overall efforts to stimulate the economy in the wake of the Covid-19 pandemic.

At the close yesterday, CPO futures contracts for January, February, March and April were hovering between RM3,320 and RM3,646 per tonne, while the physical CPO price for January South slipped RM20 to RM3,660 per tonne.

Plantation analysts located support at RM3,350 and resistance at RM3,520 per tonne.

Ok let's do a breakdown

1) THE 8% CPO EXPORT TAX IS BASED ON CPO PRICES REACHING RM3,450

THAT MEANS THAT MALAYSIA GOVT EXPECTS THAT CPO PRICES SHOULD AT LEAST TRADE ABOVE THAT FIGURE

2) THE TAX PERIOD IS FIXED FOR THE MONTH OF JANUARY 2021 ONLY

The rate would be effective on Jan 1 until Jan 31, 2021

NOTHING IS MENTIONED AS YET BY FEB 2021

3) THE MONTHS OF OCT, NOV & DEC 2020 WILL STILL SEE ZERO TAX & ALL 3 MONTHS RESULT WILL BE STILL REPORTED IN FEBRUARY 2021 AS NEW RECORDS COMPARED TO ALL OF 2020 AS CPO PRICES REACHED RM3,600

See: marking the end of the zero export tax enjoyed from June to December 2020, which was aimed at raising the value of Malaysian palm exports to other countries, mainly India.

4) SINCE THE COST OF PRODUCTION RANGES FROM ONLY RM1,600 TO RM1,800 A TONNE - ALL PALM OIL STOCKS WILL REPORTED SPECTACULAR PROFITS

5) SINCE GLOVE PRICES ARE NOW FULLY VALUED, VACCINE STOCKS HAVE RUN FAR AHEAD OF ITS REAL VALUE - ONLY PALM OIL SHARES STILL REMAIN VERY VERY UNDERVALUE

QUESTION NOW IS

WILL CPO PRICES BE A FLASH IN THE PAN? OR WILL IT LAST LONGER TERM IN A PROLONGED CYCLE OF ANOTHER 4 TO 5 YEARS LIKE IT DID IN YEAR 2010, 2011, 2012, 2013 & 2014??

WHY CALVIN THINKS IT IS POSSIBLE TO SEE CPO BULL RUN LAST MUCH LONGER?

WHY?

ANSWER:

1) CHINA 5 TYPHOONS WIPED OF ALL ITS FOOD IN YEAR 20202 DUE TO 5 TYPHOONS; 3 SUPER TYPHOONS HIT HEILONGJIANG THE BREAD BASKET OF CHINA AT ONCE NEVER BEFORE IN THE HISTORY OF CHINA

2) CHINA LEADS IN BUYING SOYBEAN & CORN FROM USA LIKE NEVER BEFORE

SEE HOW SOYOIL PRICE IN USA CROSSED USD40 NOW

SOY OIL UP MEANS PALM OIL WILL GET A STRONG BOOSTER

ALL BECAUSE WORLD SOYBEAN DEMAND EXCEEDS SUPPLY FOR NOW

AND NOW ONLY HOPE OF MORE SOYBEAN IS FROM SOUTH AMERICA 5 NATIONS OF BRAZIL, ARGENTINA, URUGUAY, PARAGUAY, BOLIVIA

BUT NEWS ALREADY OUT THAT ONLY BRAZIL SOYBEAN BELT GOT SOME SCATTERED RAIN & VERY LITTLE RAIN IN ARGENTINA

IN FACT BRAZIL MAIN SOYBEAN REGION OF MATO GROSSO IS FACING VERY HOT WEATHER RIGHT NOW

SEE TODAY WEATHER FORECAST IN MATO GROSSO

36°Hi

RealFeel® 38°

Hot with clouds and sun

THE FEEL IS 38 DEGREE CELSIUS

HOW MUCH IS 38 DEGREE CELSIUSIN FARENHEIT?

SEE Nearby Values

A VERY HOT OVER 100 FARENHEIT

ALL SOYBEAN WILL BE SCORCHED DRY

SO WILL THERE BE SOYBEAN FOR SALE NEXT MONTH IN SOUTH AMERICA?

MAYBE SOME BUT DON'T EXPECT MUCH

WHY?

READ THIS 

What is the ideal temperature for soybeans? Soybeans are a temperate leguminous plant with an ideal daytime temperature of 85° F. When air temperatures exceed 85° F, soybeans can experience heat stress regardless of reproductive stage. When soybeans experience heat stress, yield reductions can begin to occur, especially when soil moisture is limiting. Heat stress during flowering can result in pollen sterility and reduced seed set. Temperatures exceeding 85° F can result in a decreased number of pods while temperatures above 99° F severely limit pod formation. Heat stress at the R5 growth stage (beginning seed), has the greatest impact on soybean yield. During seed fill, daytime temperatures of 91-96° F result in fewer seeds per plant. Daytime temperatures greater than 85° F during seed fill can result in decreased soybean weight.

From here we see High Hot Weather in South America will have great impact on soybean yield

BY NOW WE ALREADY KNOW THAT SOYBEAN FOR JANUARY TO MARCH 2021 WILL BE LESS FOR 2021

SO SOYBEAN OIL PRICES WILL STAY ELEVATED

AND PALM OIL WILL GO INTO A PROLONGED BULL RUN

3) LA NINA FACTOR

TYPHOON & DROUGHT ARE CAUSED BY LA NINA WEATHER PATTERN

NOW IF LA NINA CONTINUES FROM HERE WHEN WILL IT END?

ONE YEAR?

TWO YEARS?

THREE YEARS?

FOUR YEARS?

OR FIVE YEARS?

PALM OIL BULL CANNOT BE STOPPED EASILY AS PRODUCTION OF PALM OIL CANNOT BE INCREASED LIKE GLOVES

IT TAKES AT LEAST 4 YEARS TO PLANT & SEE OIL PALM BEARS FRUIT

NO SHORT CUT UNLIKE GLOVES WANNABEES SET UP GLOVE FACTORIES IN 6 TO 9 MONTHS

THERE IS NO ANTIDOTE TO PALM OIL FOOD SHORTAGE UNLIKE COVID 19 GOT VACCINE TO STOP IT

NOW ALL ARE RUSHING INTO GLOVE & VACCINE THEME & NEGLECTED PALM OIL BULL THEME

SO?

SO WE HAVE A VERY GOOD ENTRY PRICES AS IGNORANT PEOPLE ARE AVOIDING PALM OIL BULL RUN

WE CAN BUY CHEAP TO OUR HEARTS' CONTENT

BEST REGARDS

Calvin Tan Research

Singapore

https://www.macrotrends.net/futures/lumber