MARKET DEVELOPMENT
BW Confident Palm Oil Prices Are on Rebound
BW Confident Palm Oil Prices Are on Rebound
11/07/2013 (Jakarta Globe) - BW Plantation saw some recovery in the second-quarter palm oil selling price but it remained lower than the same period a year earlier amid a weakening global commodities market.
In a filing to the Indonesia Stock Exchange (IDX) on Wednesday, the company said that during the first six months of this year it sold 76,994 metric tons of crude palm oil, up 22 percent from the same period last year.
But the six-month average selling price fell 17 percent to Rp 6.35 million ($637) per metric ton.
“The average price is lower than last year but we are seeing some improvement on a quarterly basis since the fourth quarter last year,” Kelik Irwantono, corporate secretary at BW Plantation, told the Jakarta Globe on Wednesday.
The company and its subsidiaries hold around 96,000 hectares of plantations across Kalimantan, with almost one-third currently under cultivation, operate two processing facilities and have more than 5,000 employees.
On quarter-on-quarter basis, prices in the first three months of the year rose by 3.5 percent on the back of increased demand from China and Pakistan, followed by a further increase 11 percent in the second quarter.
“We are hoping this trend will continue, however it is still hard to predict the global market,” Kelik said.
He added that CPO auctions had attracted healthy interest and high bids, especially from local cooking oil producers stocking up on CPO in anticipation of increased demand during the fasting month of Ramadan and the Idul Fitri holiday.
So far this year, the price of CPO in Malaysia has risen 3.7 percent.
Joseph Pangaribuan, an analyst with Samuel Sekuritas, said he lowered his CPO price estimate to $900 per metric ton this year from an earlier estimate of $998 per ton as the commodity was facing competition with soybean oil from China. China and India are the largest importers of Indonesia’s CPO.
To maintain its revenue growth amid weak selling prices, Kelik said the company is trying to boost its sales volume by 25 percent this year from last year’s 119,624 metric tons.
Shares of BW Plantation fell 2.6 percent to Rp 750, while the market as a whole gained 1.7 percent on Wednesday after three days of losses.
The shares are down 46 percent since the start of the year.
In a filing to the Indonesia Stock Exchange (IDX) on Wednesday, the company said that during the first six months of this year it sold 76,994 metric tons of crude palm oil, up 22 percent from the same period last year.
But the six-month average selling price fell 17 percent to Rp 6.35 million ($637) per metric ton.
“The average price is lower than last year but we are seeing some improvement on a quarterly basis since the fourth quarter last year,” Kelik Irwantono, corporate secretary at BW Plantation, told the Jakarta Globe on Wednesday.
The company and its subsidiaries hold around 96,000 hectares of plantations across Kalimantan, with almost one-third currently under cultivation, operate two processing facilities and have more than 5,000 employees.
On quarter-on-quarter basis, prices in the first three months of the year rose by 3.5 percent on the back of increased demand from China and Pakistan, followed by a further increase 11 percent in the second quarter.
“We are hoping this trend will continue, however it is still hard to predict the global market,” Kelik said.
He added that CPO auctions had attracted healthy interest and high bids, especially from local cooking oil producers stocking up on CPO in anticipation of increased demand during the fasting month of Ramadan and the Idul Fitri holiday.
So far this year, the price of CPO in Malaysia has risen 3.7 percent.
Joseph Pangaribuan, an analyst with Samuel Sekuritas, said he lowered his CPO price estimate to $900 per metric ton this year from an earlier estimate of $998 per ton as the commodity was facing competition with soybean oil from China. China and India are the largest importers of Indonesia’s CPO.
To maintain its revenue growth amid weak selling prices, Kelik said the company is trying to boost its sales volume by 25 percent this year from last year’s 119,624 metric tons.
Shares of BW Plantation fell 2.6 percent to Rp 750, while the market as a whole gained 1.7 percent on Wednesday after three days of losses.
The shares are down 46 percent since the start of the year.