Price fall because of what Sardin said? Bad harvest? Cannot be so big reaction right? Furthermore, palm oil price is doing so well currently above 4,200.
Based on current palm oil rm4000+ N div 1100 , the article in Nanyang is ???? Based on chart to predict..any movement in stk price partly affected by fund mgr ..let see the price after x div
CPO priced at RM4476 and fund manager tekan the share price. Any reason not to acquire UP during salary day ? I foresee the next round price up will be near dividend ex-date or after AGM.
TLC, please refer to AR pg 203. They already hedge 1H 53625MT of CPO@ average of RM3980, 2H 28550MT @3800. Also you can compare to their FY 2023 forward contract info. in the page. You will be able to have a better estimation of UP profit. Luckily this year, they did not hedge a lot in anticipation of price increase. It seems that they had learned from their mistake in FY2021 n 2022
It's harder to predict their profit since they only hedge 1/3 of their output as per AR info. I also do not know how much they already sell forward along the way until QR out. But I believe we are in good hand, hope this year Div is around 1.5.😄
It can be summarised into 2 main points: 1. Selling cpo considerably below market value 2. Lesser cpo output And looks like both are going to happen together. Besides that there are a few more things I try to figure out.
FY2023 Q1 ASP 37xx, This year CPO price Jan 3783.5 Feb 3949.5 Mar 4215.5 Info from MPOB. UP hedge 1H 53620MT @3980. So, I don't think Q1 will affect much. Have to look out for Q2 if CPO stay above 4200 for Q2. Output wise, if it's below 5% YoY, will not affect much. Will catchup starting Q2. This year UP forward sales volume is low compare to last few years. Up trend in CPO price will have lesser effect on profit. Hopefully they can cover it with higher yields.
Not sure if output with catch up in Q2 because El Nino effect is known to be lasting for months / years. RM 3,800 / MT in Q3 a bit too much of the discount compares to BMD FCPO in Jul, Aug, Sep.
2H forward contract qty is 28550MT, around 1/4 of UP Malaysia plantation 2H output. I think effect will not be so much. As for output, you can attend the AGM to ask the management on the effect of El Nino on FFB production
Maybe you can study changes in yield per mature hectare for its Indonesian and Malaysian plantations respectively during the historical El Nino years.
The questions are 1. How does El Nino affect Peninsular Malaysia and Kalimantan? 2. Do we have strong or normal El Nino in 2024? 3. How does it affect CPO price? 4. What is the net result if there is declining yield but higher prices?
What about the prices and outputs of other competing oil crops?
I suspect even professional traders find it difficult to answer confidently.
@Observatory The El Nino effect in 2024 is expected to be at moderate level, and of course it will push up the CPO price. However, the high price of CPO is meant to compensate the reduction of output. If output is low, production cost per metric ton will be higher (assuming constant fixed cost, such as salaries, chemicals, etc.) and if the selling price is not high enough, it will squeeze the profit margin considerably. How much this will affect UP, I am not confident to answer and I am far from being a professional trader. But when I water my plants, and hang my clothes, phew... the weather is really really hot, I could feel the abnormal amount of heat. If this is only "moderate" I don't know how a serious El Nino feels like? My trees do not bear good fruits compares to a few months back, a lot less fruits and smaller fruits are what I got.
UP did a risk assessment, I forgot which page on the annual report. Weather / climate has a rating associated to high risk and high impact besides the commodity price. I hope the contracted price had more than enough to adverse the impact of lower production. But I also know it is difficult to get a good deal / price stroke a few months back when effect of El Nino is not yet manifested. I believe there is a margin squeeze, hope it is a light one.
trust the management ... i still think their tanah rata not reach the optimum palm oil output when that kick start the output will be fantastic ..... for now i just wait and see while all enjoy riding utdplt don't forget to grab a carlsberg beer and enjoy your day ... hahah kena promote mah ...
fking haze from Sumatra make my nose itchy, hope more rain coming in mid April to deal with the fire & Haze. Most important is providing water source for the palm oil in this El Nino time.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
lionel messi
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Posted by lionel messi > 2024-04-03 12:27 | Report Abuse
Price fall because of what Sardin said? Bad harvest? Cannot be so big reaction right? Furthermore, palm oil price is doing so well currently above 4,200.