Barefoot Investor: Malaysia Plantations down in late morning

At 11.07am, the FBM KLCI was down 1.48 points to 1,576.62. Turnover was 269.42 million shares valued at RM350.04 million. There were 223 gainers, 227 losers and 253 stocks unchanged.

Batu Kawan fell 12 sen to RM16.80 while Genting Plantations and Kuala Lumpur Kepong declined 10 sen each to RM7.84 and RM22.14.

On Tuesday the steep recovery in CPO production levels has resulted in CPO prices continuing on its downward trend, falling another 6.8% on-month to current levels of RM3,053 a tonne, from last month’s average of RM3,275 a tonne.

It has also led Oil World to raise its global CPO production estimates for Oct/Sept 11 to 48.2 million tonnes (up 0.4% from previous estimates), which implies a 4.6% on-year increase (from 4.1% previously).

As a result of the revised projections, global stock/usage ratio for 2011 is now projected at 16.3% (from 15.7% previously), up from 15.3% in 2010.
Based on these projections, Oil World now expects CPO prices to fall to about US$900-US$950/tonne (RM2,700-RM2,850/tonne) in the October-December 2011 quarter.

Oil World has also released its projections for 2012, expecting global CPO production to rise by another 5.7% on-year to 51 million tonnes, and global consumption to rise by 6.1% on-year. This would result in global stock/usage ratio for CPO to remain relatively flat in 2012, at 16.3%.(


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