palmoilanalytics.

com Bloomberg: POAS <GO>

ASIA MID-DAY MARKET REPORT 26TH APRIL 2019

OUTLOOK FCPO-BMD
IN THE NEWS Trading
 Market Commentary range JULY 2019


PRICE WATCH
RBD Palm Olein trades 2125 RM 2123
 Fundamental data due next
to (US$ 514)
2175
week 29 April—3 May and RM -34
expectations (US$ -8.23)
Benchmark
 Malaysia 1-25 April export trading range
table Singapore London for the week Total volume: 13,920

RBDP Olein RBDP Oil CPKO RBDP Olein

530 525 580 565

FOB—Malaysia—PK/PG FOB Malaysia—PK/PG FOB Indonesia –BL/DM CIF India—Kandla

May May May May
The above table shows selection of latest prices. All prices in US$ per-metric ton

FUTURES PLUNGE TRACKING SHARP LOSSES ON DALIAN

FOLLOWING LINGERING NEWS OF AFRICAN SWINE FEVER
MARKET COMMENTARY
BMD opened 21 point down at 2136 mirroring the 1% lost on soy-
bean oil on CBOT, the lowest since mid-Jan. Palm olein and soy-
bean oil took massive hits again on Dalian as the African swine
fever news linger. Malaysia April exports looks edgy after the 3
surveyors reported varying estimate for 1-25 April. SGS said an
increase of 1.36%. ITS and Amspec reported up 5% and 9% re-
spectively. Any value below 1.60 million tons for full April will see a
drop in exports from March but not necessarily a rise in stocks.
Production is seen slowing down after output tumbled in Sabah.
Physical prices, especially laurics could see more downside. July
traded 2137-2116 and Ringgit is up 0.15%. Next week we assess
April full month exports & production and weigh the stock balance.

PRICES/SPREADS
Futures - Bursa Malaysia Derivatives
FCPO on BMD Closing (RM) Closing (US$) RM % Vol.
Benchmark - July 2019 2,123 514 -34.00 -1.58 7,454
SPREADS US$ Change %
CPO-GO Spread -132.21 -9.51 -7.75
SBO-CPO Spread 96.40 -3.05 -3.07
CDSBO-OL Spread 80.00 -1.50 -1.84
PRICE WATCH
Continued weakness in the CBOT Future soybean oil contracts pulled CPO prices down, wiping out positive effects from an uptick in export shipments.
July benchmark sank below the support floor of RM2150 at the opening bell, starting trading at RM2136 (US$514) today. With pressure on the produc-
tion outlook – which is looking to be stronger than expected for the month – the benchmark fell further, down to a midday close of RM2123. The across-
the-board falls in CPO traded prices come despite positive news on Chinese imports, with Malaysia striking a deal to sell 1.9 million tons of palm oil to
China over a five-year period or an addition of 400,000 tons a year this morning. While this would be a net positive for supply/demand fundamentals
over the long-run, the CPO market is currently focused on short-term trends, with expectations that Malaysia will be unable to shave a significant amount
of its currently high inventory levels. Together with dampened pre-Ramadan demand, we expect that CPO prices will be stuck in the RM2100-2200 range
for May. With palm oil entering peak harvesting season in Q319, further pressure could build, leaving little respite on the horizon for palm oil players.

Physical - Reported Trades and Bid/Offer Prices

(all in per-metric ton unless otherwise specified) b = buyer & s = seller
CPO FOB Indonesia - FOB Belawan (BL) /Dumai (DM)
Delivery month May Jun July Aug Sept
USD 492.50 (s) 502.50 (s) 510 (s) 512.50 (s) 515 (s)

RBD Palm Olein FOB Malaysia—Port Klang (PK) or Pasir Gudang (PGG)- Reported trades
Delivery month
USD No reported trades

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palmoilanalytics.com Bloomberg: POAS <GO>
ASIA MID-DAY MARKET REPORT 26TH APRIL 2019

PRICES
Physical - Reported Trades and Bid/Offer Prices USD to RM = 4.1300
(all in per-metric ton unless otherwise specified) (b = buyer & s = seller)
RBD Palm Olein FOB Malaysia—Port Klang (PK) or Pasir Gudang (PGG) Last prices
Delivery month May Jun JAS OND JFM
USD 530 (s)-522.50 (b) 540 (s) - 535 (b) 545 (s)-542.50 (b) 555 (s) - 550 (b) 580 (s) - 572.50 (b)

RBD Palm Oil FOB Malaysia—Port Klang (PK) or Pasir Gudang (PGG)
Delivery month May Jun JAS
USD 525 (s) 535 (s) 540 (s)

RBD Palm Stearin Delivered basis - Malaysia

Delivery month May
USD 482.50 (s)

RBD Palm Stearin FOB Indonesia - Belawan (BL) /Dumai (DM)

Delivery month May
USD 472.50 (s)

PFAD Delivered basis - Malaysia

Delivery month May
USD 440 (s)

PFAD FOB Indonesia - Belawan (BL) /Dumai (DM)

Delivery month May
USD 430 (s)

Local CPO - South Malaysia RBD Palm Olein —CIF Kandla—India ports—25th Apr
Delivery month May Delivery month May
RM 2050 (s) — 2030 (b) USD 565 (s)

CPKO FOB Indonesia - Belawan (BL) /Dumai (DM) CPO—CIF Kandla—India ports—25th Apr
Delivery month May Jun Delivery month May
USD 580 (s) 600 (s) USD 525 (s)

Local CPKO - Malaysia - (price per-picul [16.5346 picul = one mt])

Delivery month May - South Delivery month May—Central Jun
RM 139 (s) RM 138 (s) - 136 (b) 140 (s)

RBD PKO—Malaysia—Port Klang South (PKS) or Pasir Gudang (PGG)

Delivery month May-Jun
USD 655 (s)
APEX—RBD Palm Olein Futures (PF) (1 lot = 10 metric tons)
Delivery month Open Last price Prev. settlement Change (US$) Volume
Jun.19 540.25 534.00 541.75 -7.75 5,106
Jul.19 539.50 534.25 543.00 -8.75 3,313
Aug.19 539.25 535.00 544.00 -9.00 3,594
Dalian Commodity Exchange - Palm Olein
Delivery month Change (RMB)
May.19 -70
Sept.19 -62
Jan.20 -52

Dalian Commodity Exchange - Soybean oil

Delivery month Change (RMB)
May.19 -86
Sept.19 -86
Jan.20 -80
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palmoilanalytics.com Bloomberg: POAS <GO>
ASIA MID-DAY MARKET REPORT 26TH APRIL 2019

NEWS & ANALYSIS

Fundamental data due next week 29 April—3 May and expectations
1. GlobOil conference in Dubai, 28 – 30 April—this will be the most followed event at the start of next week on palm and
grain market view and direction from leading analyst. Focus will be on price and production outlook and the corresponding
assessment on stock levels outlook in the third and final quarter of 2019. Will the palm market be stuck in the bearish
sentiment for the rest of the year? Can the crude oil rally lift palm biodiesel demand? GAPKI vice chairman will be present-
ing on the Indonesian palm oil including the biodiesel scenario there. Attention will be on progress made to hasten the B30
plan to third quarter of this year. The higher mandate will start absorbing greater volume of CPO exceeding the 4 million
tons initially expected for B20 mandate. How much stocks will fall from this move and will this be supportive of prices?
Also there will be presentation on palm oil development in Latin America which we don't hear much. Colombia is said to
overtake Thailand as the third biggest producer in 2020, so will be interesting to know what is going on there. There will be
a session on sustainability and risk, no doubt thoughts will be offered on the E.U impending ban on palm based biodiesel
by 2023 under the RED II program. More on the agenda : http://www.globoilinternational.com/cp.pdf
2. GAPKI Indonesia supply and demand for March—GAPKI may release their March data next week which will be consid-
ered early if they do. Estimates in the market show stocks edging down slightly by 1% to 2.530 million tons, still 31% lower
than the same time last year and supportive of fundamentals. Also keenly watched is domestic consumption, expected to
tumble by 6% to 1.420 million tons, taking a breather after 2 months of robust rise. Exports are seen declining by 1% to
2.850 million tons, following displacement by Malaysia in the RBD palm olein market share in India. Meanwhile, produc-
tion is assessed rising nearly 2% to 3.950 million tons, inline with seasonal pattern.
3. MPOA 1-30 April Malaysia production—This will be the most crucial fundamental data in guiding prices. MPOA full month
should be released by the 7th of May, ahead of key MPOB data. Full month April production is expected to be up 2% at
1.705 million tons. Main contributor to the rise will be from the state of Sarawak which accounts for 20% of total CPO out-
put. and the main slack will be Sabah due to lack of rainfall in key oil palm plantation areas. Last MPOA data for 1-20 April
reported overall Malaysia rise of just 0.33% with Sarawak reporting a rise of 11.36% and Peninsular up 1.70%. Sabah was
down by 7.50%. Last year April production was up 1.80% according to MPOA and down 1% according to MPOB. Malaysia
Palm Oil Association is an oil palm membership body covering 2 million hectares accounting for almost 40% of the count
4. ITS, Amspec, SGS 1-30 April Malaysia export—Full month exports are expected to show a rise of 4—6% to top of 1.715
million tons based on the varying estimate for 1-25 April as reported by the 3 cargo surveyors. However consensus show
the main destinations helping to lift the volumes are India, Asia Oceania and China. The E.U is seen as the main drag in
April, particularly for CPKO products, but this will change towards end of the month after sharply falling prices in April likely
to stoke buying interest though some of the shipment will be into May. Robust rise in RBD palm olein and CPO export to
India will keep April numbers higher than March. Malaysia RBD palm olein export to India in the first 25 days is at multi-
month high. Favourable buying conditions from India been helping to keep Malaysia export numbers strong but how long
will this be sustained? May exports could tumble sharply compared to the high base set by India in April and from slow-
down in pre-Ramadan buying. Estimate data are due on 30 th of April. The extent of export rise is critical in April ahead of
the start of high production season from May onwards, as any slower export increase will negate the decline in stocks.
5. Malaysia 1-30 April supply & demand estimate – Estimates from CIMB, Bloomberg and Reuters will be published after
the full month cargo surveyor numbers are released. Undoubtedly focus will be on stock values. We estimate stocks falling
by 5 to 6.75% to the lowest of 2.720 million tons in April. This would be the lowest in 7 months but still 25% higher than
same time last April. Imports will also be keenly watched after recording a staggering 39% increase to 131,242 tons in
March. Any increase in imports will pile on the stocks, dampening export rise. We estimate imports to nearly half in April to
about 60,000 tons. The main risk to imports rising is the creeping increase in Indonesia CPO discount to Malaysia in April.
A rising discount attracts Malaysian refiners to buy CPO from Indonesia at a lower price.

Malaysia export 1-25 Apr vs. 1-25 Mar 2019 (in mt) Malaysia export 1-20 Apr vs. 1-20 Mar 2019 (in mt)
ITS : 1,208,775 vs. 1,152,379 (+56,396 or up 4.89%) ITS : 900,920 vs. 881,924 (+18,996 or up 2.15%)
AmSpec : 1,260,622 vs. 1,158,178 (+102,444 or up 8.85%) AmSpec : 892,477 vs. 908,718 (-16,241 or down 1.79%)
SGS : 1,278,060 vs. 1,260,946 (+17,114 or up 1.36%) SGS : 939,657 vs. 925,431 (+14,226 or up +1.54%)

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