18/04/2012 (Live Trading News) - Demand for edible oils has been resilient to a slowdown in the global economy, history shows. Consumption of the nine biggest oils gained 3.8 percent in the 2008-09 marketing year as economies grappled with the worst global recession since World War II, USDA data show.

Demand for edible oils is climbing to a record as drought damages crops across South America, leaving buyers with the smallest stockpiles in three decades.

Cooking oils advanced as drought in Brazil and Argentina contributed to a 9 percent slump in global soybean harvests, the most since 1996. Palm oil increased 9.5 percent to 3,477 ringgit this year and soybean oil rose 7.5 percent in Chicago as the Standard & Poor’s GSCI Agriculture Index of eight commodities declined 2.2 percent.

Retail sales of bottled oils will reach a record 38.7 million tons this year, lifting the value by 6.8 percent to $56.5 billion, according to Euromonitor International, a London- based research group.

Kuok Oils & Grains, a unit of Wilmar International, had a global market share of 8.9 percent in 2010, making it the biggest supplier to the retail market, Euromonitor estimates.

The use of soy, palm, rapeseed and six other oils will rise 3.9 percent this year, reducing the ratio of reserves to demand to the lowest since 1977, the US Department of Agriculture estimates. Palm, the most-consumed oil, will advance 9.3 percent to 3,800 ringgit ($1,239) a metric ton in Kuala Lumpur by Dec. 31, the highest since February 2011, according to the median of 11 analyst and trader estimates

Production of palm, which represents more than 30 percent of cooking-oil output, will expand two million tons this year, compared with a 5.5 million-ton increase in 2011, according to Dorab Mistry, the director of Godrej International. He predicts prices will climb to 4,000 ringgit by June.

Output in Malaysia, the second-biggest producer after Indonesia, will drop in the first half from a year earlier, Mistry said last month.

Wilmar
Wilmar International Limited is an investment holding company engaged in the provision of management services to its subsidiaries.

The Company operates in seven segments: palm and laurics, which comprises the merchandising and processing of palm oil and laurics related products; oilseeds and grains segment, which comprises the merchandising and processing of a range of edible oils, oilseeds and grains from the crushing; consumer products, which comprises packaging and sales of consumer pack edible oils, rice, flour and grains; plantation and palm oil mills, which comprises oil palm cultivation and milling; milling segment, which comprises milling of sugarcane to produce raw sugar and also by-products, such as molasses; merchandising & processing comprises the merchandising and processing of sugar and its related products, and others, which includes the manufacturing and distribution of fertiliser products and ship-chartering services.

Bumitama
Bumitama Agri IPO followed the path predicted by Economist Shayne Heffernan of HCM today. Bumitama shares traded as high as S$1.02, about 37 percent higher than its IPO price of S$0.745, on volume of more than 195 million shares. It was the top traded stock by value and the second highest by volume in the market.

The IPO was heavily over subscribed and the issue was the latest in a string of IPOs returning to the Singapore market this year.

The weighted average age of Bumitama’s oil palm trees is about five years old and only 28.1 percent of its planted area have reached peak production age of between 7 and 18 years, the company said in a statement. This makes Bumitama a long term winner, IOI Corp the parent company of Bumitama traded heavily in Kuala Lumpur today, IOI should see long term gains both from it’s stake in Bumitama and from redeploying the cash raised from the sale.

Shayne Heffernan has a short term target of $2 on Bumitama.

Sime Darby
Sime Darby Berhad operates in six segments. Its plantation segment is engaged in the production and marketing of fresh fruit bunches. Its property segment develops and markets residential, commercial and industrial properties. Its industrial segment is engaged in sales, rental and servicing of heavy equipment. On January 5, 2012, it incorporated Nanjing Sime Darby Motors Sales & Services Company Limited.

In January 2012, it disposed Dunlopillo Holdings Sdn Bhd. On December 31, 2011, it dissolved Sime Darby Realty Development Corporation, Sime Darby Industries Inc. and Sime Darby Pilipinas, Inc. In March 2012, it liquidated Sime Darby Harta (Damansara) Sdn Bhd, Sime Darby Property Development Sdn Berhad and Sime UEP Executive Suites Sdn Bhd. On March 31, 2012, Malaysia Marine and Heavy Engineering Holdings Berhad acquired Pasir Gudang Fabrication Yard together with assets located thereon from Sime Darby Engineering Sdn Bhd, which is its subsidiary