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ASIA CLOSING MARKET REPORT & SUMMARY OF LAURICS AND STEARIN 30TH MARCH 2020

OUTLOOK
NEWS Trading FCPO-BMD
range JUN 2020
 Market Commentary
 RBDP Olein trades 2325 RM 2437
 Weekly Laurics Market up- to (US$ 563)
date 2475
 Weekly Stearin Market up- RM +59
date (US$ +13.64)
Benchmark
 Data released last week and trading range
data to be released this week Singapore London for the week Total volume: 50,491

RBDP Olein RBD PKO CPO CCNO

572.8 770 592.5 880

FOB Malaysia –PK/PG FOB Malaysia FOB Indonesia– BL/DM CIF Rotterdam
Average traded May Apr Apr-May
The above table shows selection of latest prices. All prices in US$ per-metric ton

FUTURES POST SOLID GAINS AT THE BACK OF LOWER OUT-

PUT & BETTER EXPORTS OFFSETTING WEAKER MACROS

MARKET COMMENTARY
CPO market was firm despite weakness in Asian equities. Lower major cities in a bid to suppress the spread of Covid-19 virus. Ma-
production outlook in Malaysia particularly from the state of Sabah laysia Mar export was heard up 4-5%. Actual data is due tomorrow.
which account for 25% of total annual production is supporting the June traded 2466-2402. This week we will hear estimates on
higher prices today. A lower production scenario set against strong March production and S&D estimates ahead of MPOB report. High-
buying from China pushed benchmark contract up 88 points. China er exports and lower production supported higher CPO offsetting
returned to buying after 3 months of absence amidst lockdown in weaker macro market fundamentals. Next: March exports
PRICES
Futures - Bursa Malaysia Derivatives
FCPO on BMD Closing (RM) Closing (US$) RM % Vol.
Benchmark - Jun 2020 2,437 563 +59.00 +2.48 21,466
SPREADS US$ US$ %
CPO-GO Spread 263.15 19.23 7.88
SBO-CPO Spread 52.42 4.42 9.20
CDSBO-OL Spread -10.00 -3.00 -42.86

Physical - Reported Trades and Bid/Offer Prices

(all in per-metric ton unless otherwise specified) b = buyer & s = seller
CPO FOB Indonesia - Belawan (BL) / Dumai (DM)
Delivery month Apr May Jun
USD 592.50 (s) 587.50 (s) 582.50 (s)

CPO CIF Rotterdam

Delivery month Apr May Jun JAS OND
USD 645 (s) - 625 (b) 642.50 (s) - 625 (b) 630 (s) - 615 (b) 620 (s) - 600 (b) 610(s)-590(b)

RBD Palm Olein FOB Malaysia —Port Klang (PK) or Pasir Gudang (PGG) - Reported trades
Delivery month JAS OND
USD 573.50, 575 570

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palmoilanalytics.com Bloomberg: POAS <GO>
ASIA CLOSING MARKET REPORT & SUMMARY OF LAURICS AND STEARIN 30TH MARCH 2020

PRICES
Physical - Reported Trades and Bid/Offer Prices USD to RM = 4.3255
(all in per-metric ton unless otherwise specified) b = buyer & s = seller) 0.38%
CPKO FOB Indonesia - Belawan (BL) / Dumai (DM)
Delivery month Apr May Jun
USD 680 (s) 690 (s) 700 (s)

CPKO CIF Rotterdam

Delivery month Apr-May May-Jun Jun-Jul Jul-Aug Aug-Sept
USD 670 (s) 750 (s) 765 (s) 780 (s) 790 (s) - 765 (b)

CCNO CIF Rotterdam

Delivery month Apr-May May-Jun Jun-Jul Jul-Aug
USD 880 (s) 890 (s) - 840 (b) 900 (s) 910 (s)

RBD Palm Olein FOB Malaysia —Port Klang (PK) or Pasir Gudang (PGG) - Last prices
Delivery month Apr May-Jun Jun JAS OND
USD 610 (s) - 600 (b) 600 (s) 595 (s) 577.50 (s) - 572.50 (b) 575 (s) - 567.50 (b)

RBD Palm Oil FOB Malaysia—Port Klang (PK) or Pasir Gudang (PGG) RBD PK Oil—FOB Malaysian ports
Delivery month Apr AMJ Delivery month May
USD 607.50 (s) 597.50 (s) USD 770 (s)

RBD Palm Stearin - Delivered basis—Malaysia CPO Indonesia PTPN Tender

Delivery month Apr Rupiah/kg US Dollar/ton—FOB Friday
USD 630 (s) 8,500 578.32 562.09

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

Delivery month Apr
USD 620 (s)

PFAD—Delivered basis - Malaysia

Delivery month Apr
USD 590 (s)

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

Delivery month Apr
USD 580 (s)

Local CPO - South Malaysia— Reported trade RBD Palm Olein—CNF South China
Delivery month Apr Apr Delivery month Apr-May
RM 2550 (s) - 2520 (b) 2530—traded USD 610 (s)

Local CPKO - South Malaysia - (price per-picul [16.5346 picul = Local CPKO - Central Malaysia - (price per-picul [16.5346 picul =
one metric ton]) one metric ton])
Delivery month Apr-May Apr
RM 185 (s) 182 (s)
APEX—CPO Futures (CPF) (1 lot = 10 metric tons)
Delivery month Open Last price Prev. settlement Change (US$) Volume
Jun.20 563.50 574.00 560.75 13.25 2,154
Jul.20 551.50 564.50 553.00 11.50 7,997
Aug.20 549.00 559.25 551.00 8.25 5,514
Dalian Commodity Exchange - Palm Olein (RMB/ton) (Volume is bilateral) (1 lot = 10 metric tons)
Delivery month Open Previous settlement Settle Change Volume
May.20 4,896 4,828 4,950 122 882,565
Sept.20 4,798 4,776 4,854 78 363,081
Jan.21 4,866 4,858 4,924 66 5,683

Dalian Commodity Exchange - Soybean oil (RMB/ton) (Volume is bilateral)

Delivery month Open Previous settlement Settle Change Volume
May.20 5,450 5,440 5,490 50 173,026
Sept.20 5,540 5,520 5,574 54 478,383
Jan.21 5,624 5,626 5,674 48 14,240
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palmoilanalytics.com Bloomberg: POAS <GO>
ASIA CLOSING MARKET REPORT & SUMMARY OF LAURICS AND STEARIN 30TH MARCH 2020

NEWS & ANALYSIS — Weekly Laurics & Stearin Market update: 30 March—3 April 2020
CPKO: Stall in price fall, lower production and export outlook
Local CPKO prices edged down RM 0.60 to a weekly average of RM
175.40/picul or US$ 667/ton after failing to build on the gains from
the week prior. CPKO traded largely steady at RM 177-175/picul at the
back of firm CPO Futures market. With the month coming to an end,
CPO and CPKO production are expected to be lower from the disruption
in the oil palm supply chain from harvesting to exports. Exports are
seen performing slightly better on increase in shipment to China as the
country recover from 3 months of lockdown. Stocks meanwhile are
forecast to fall for the third month in a row to between 180,000 to
160,000 tons, the lowest in 22 months. Malaysia CPKO is expected to
be in tight supply in April as production decline and stocks dwindle,
making availability difficult and pressuring prices to move upwards.
Exports may see a fall in April after a rise in March given the global scale slowdown in shipping and port activities in the
E.U and India. Outlook : Prices are expected to trade higher at the back of lower production and supported by the higher
CPO Futures. Expect prices to reach a high of RM 185-190/picul this week. (1 ton= 16.5346).
CPKO CIF Rotterdam—Higher offer prices and active trading dominate the week
Rotterdam offer prices advanced US$ 30-40 on spot and deferred
month delivery ranging from US$ 725-790/ton. While offers were not
called below US$ 700/ton as we expected, trades did take place below
US$ 700/ton between US$ 650-685/ton on the spot month delivery.
Forward month trades took place between US$ 665 to 775/ton. In all
instances, the traded values were below the asking price. A total of 11
trades were heard concluded last week, compared to none the week
before. On Friday, Rotterdam CPKO was assessed at US$ 725/ton at
the end of the week or US$ 35 higher than the week before. Higher
prices at the origin market, strong buying from China and jump in Indo-
nesian export prices by US$ 10 to US$ 670/ton on FOB basis pushed
up Rotterdam destination prices. As highlighted last week, the port of
Rotterdam remain operational, with cargo handling and production con-
tinuing unabated. However with the evolving situation on Covid-19, any action to reduce or stall the port activity will have a
major repercussion on Malaysian and Indonesian palm product shipment and consequently on prices. Outlook: Traded
prices are expected to advance above US$ 700/ton for spot month and deferred months to test US$ 800/ton this week.
CCNO CIF Rotterdam — Offer prices rise, more trades take place but spread to CPKO widen
CCNO offer prices rose by US$ 25-40 last week with the top offer asking US$ 885/ton for Aug-Sept delivery. There were
also more trades heard, 4 in total compared to none in the week before. Trades were concluded between US$ 790/ton for
nearby month to US$ 845/ton for Jul-Aug. CCNO prices were generally higher last week after rising by US$ 8 week-on-week
average basis. The higher CCNO price, widened the spread to CPKO by US$ 18 to US$ 136. The spread was US$ 58 at the
start of the year. A higher spread prompt s oleo-chemical buyers to turn to cheaper CPKO instead for sourcing lauric acid
feedstock. In the origin market, Philippines prices fell for the second week erasing US$ 10 week-on-week average basis to
US$ 788/ton. In addition to lockdown in Metro Manila, which span 16 cities all of the major ports in the Philippines are in
some sort of restrictions mainly on strict quarantine for vessels coming from China. All this is expected to slow the flow of
import and exports in March and April. Given the Philippines is the biggest copra producer for export, a slowdown in the
origin market will likely sap supply and push prices higher in the global market. Outlook: Offer prices will be in the highs of
US$ 800/ton with some delivery months even testing US$ 900/ton this week.
Malaysia Weekly Stearin Market : Stearin stays at premium to olein. Prices seen rebounding in April
RBD palm stearin prices stayed below US$ 600/ton for the first 2 days in the week but edged up to US$ 605/ton for the
rest of the week tracking the gains in the CPO Futures market. RBD palm stearin prices was generally US$ 2.40 higher on
a weekly average compared to the week before while RBD palm olein was up US$ 26.50, helping to reduce stearin premi-
um over olein from US$ 19 down to US$ 6.50. This is the seventh week stearin is at premium to olein. Stearin prices rose
rapidly rising US$ 102.50 or 20% from the start of the year, while olein edged up US$ 85 or 16% during the same time.
Depressed production, higher exports and dwindling stocks supported higher RBD palm stearin prices in the first quarter
of this year. Additionally refiners been making higher offer prices for PFAD and RBD palm stearin in order to recover the
lost margin on RBD palm olein. RBD palm olein generally trades US$ 40 above CPO, but with the fall in CPO prices, the
margin fell below US$ 40 down to US$ 10 at times in the first quarter. Last week RBD palm stearin was offered at US$
580-605/ton on Malaysia delivered basis. Stearin exports are seen improving in March while production are expected to
be lower at the back of reduced fractionation of RBD palm olein, while stocks are seen falling for the fourth month in a row
in March. Domestic demand for RBD palm stearin is forecast to rise underpinned by strong buying of personal and home
care products where oleo-chemicals like stearin and lauric acid form the main feedback. Outlook: RBD palm stearin offer
prices will trend firmly above US$ 600/ton this week. RBD palm stearin have the scope to rise higher to US$ 660/ton in
the next 2 weeks.

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 Bloomberg: POAS <GO>
ASIA CLOSING MARKET REPORT & SUMMARY OF LAURICS AND STEARIN 30TH MARCH 2020

DATA
Fundamental palm related data due this week: 30 March—3 April 2020
 CIMB, Bloomberg & Reuters Malaysia March S&D estimate
 SPPOMA 1-31st March Malaysia production
 ITS, Amspec and SGS Malaysia 1-31st March export
 ITS Malaysia & Indonesia 1-31st March PME export
 MPOA, Malaysia 1-31st March production
 EIA U.S Biodiesel production for January
 NASS U.S Grain Quarterly stock position
Data released last week
 SPPOMA 1-20th March Malaysia production
 SPPOMA 1-25th March Malaysia production
 ITS, Amspec and SGS Malaysia 1-25th March export
 ITS Malaysia & Indonesia 1-25th March PME export
 MPOA, Malaysia 1-20th March production

Malaysia 1-25 Mar 2020 vs. 1-25 Feb 2020 export (in mt) Malaysia 1-20 Mar 2020 vs. 1-20 Feb 2020 export (in mt)
ITS : 838,793 vs. 970,764 (-131,971 or down 13.59%) ITS : 644,421 vs. 817,314 (-173,893 or down 21.15%)
Amspec : 866,270 vs. 981,073 (-114,803 or down 11.70%) Amspec : 654,440 vs. 819,653 (-165,213 or down 20.16%)
SGS : Delayed due to movement restriction order SGS : Delayed due to movement restriction order

SPPOMA 1-25 Mar 2020 vs. 1-25 Feb 2020 SPPOMA 1-20 Mar 2020 vs. 1-20 Feb 2020
FFB yield : -7.27% FFB yield : -0.087%
OER : +0.43% OER : +0.51%
Production : -5.01% Production : +2.60%

ITS : Malaysia & Indonesia PME export 1-25 Mar vs. 1-25 Feb
2020 (in mt)
Total : 22,500 vs. 46,620 (-24,120 or down 51.74%)
Malaysia : 22,500 vs. 46,620 (-24,120 or down 51.74%)
Indonesia : zero vs. zero
ITS : Malaysia & Indonesia PME export 1-20 Mar vs. 1-20 Feb
2020 (in mt)
Total : 1,500 vs. 22,315 (-20,815 or down 93.23%)
Malaysia : 1,500 vs. 22,315 (-20,815 or down 93.23%)
Indonesia : zero vs. zero

MPOA CPO Production 1 - 20 Mar 2020 vs. 1-20 Feb 2020 MPOA CPO Production 1 - 20 Mar 2019 vs. 1-20 Feb 2019
Peninsular Malaysia : -1.10% Peninsular Malaysia : -0.71%
East Malaysia : +3.33% Sabah : -0.90%
Sabah : +2.56% Sarawak : -0.72%
Sarawak : +6.14% Overall Malaysia : -0.76%
Overall Malaysia : +0.35%

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