palmoilanalytics.

com
ASIA CLOSING MARKET REPORT & SUMMARY OF LAURICS AND STEARIN 21ST JUNE 2021

OUTLOOK
NEWS Trading FCPO-BMD
range SEPT 2021
• Market Commentary
• RBDP Olein trades FREE TRIAL 3300 RM 3392
• Weekly Laurics Market up- to (US$ 819)
date 3500
• Weekly Stearin Market up- RM –32
date & outlook (US$ -7.72)
Benchmark
• Data released last week and trading range
data to be released this week Singapore for the week Total volume: 65,951

RBDP Olein CCNO CPO CCNO

883 1550 1015 1680

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

FUTURES TUMBLE DRAGGING CASH PRICES LOWER TO

COMPETE WITH US$80 REDUCTION IN INDONESIAN LEVY
MARKET COMMENTARY
Palm futures was under pressure from the opening despite positive
signals from higher bean oil close on CBOT and higher trade on
Dalian, and a rising crude oil prices. Futures briefly moved into
black but was unable to sustain the gains after the Indonesian govt
confirmed revision to levy coming up this week to make palm ex-
port more competitive. Indonesia CPO exporters been losing mar-
ket share after levy + tax rose to a high of US$438 in Jun. A lower
levy means, price threat to Malaysia CPO. Malaysian prices must
fall to retain the market share. The levy reduction of US$80 was
confirmed after market close. Malaysia 1-20 Jun export showed
improvement versus the first half, declining by just 0.18%. SPPO-
MA production rose 17.50%. Sept traded 3455-3350. Next: MPOA.

PRICES
Futures - Bursa Malaysia Derivatives
FCPO on BMD Closing (RM) Closing (US$) RM % Vol.
Benchmark - Sept 2021 3,392 819 -32.00 -0.93 33,483
SPREADS US$ US$ %
CPO-GO Spread 225.03 -18.87 -7.97
SBO-CPO Spread 421.99 40.09 10.50
CDSBO-OL Spread 190.00 5.00 2.70

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 Jul
USD 1015 (s)

Delivery month Jul Aug Sept OND JFM

USD 1020 (s) - 965 (b) 990 (s) - 935 (s) 960 (s) - 905 (b) 910 (s) 900 (s)

Delivery month Jul Aug-Sept OND

USD 955 870 857.50, 850

1
palmoilanalytics.com
ASIA CLOSING MARKET REPORT & SUMMARY OF LAURICS AND STEARIN 21ST JUNE 2021

PRICES
Physical - Reported Trades and Bid/Offer Prices USD to RM = 4.1440
(all in per-metric ton unless otherwise specified) b = buyer & s = seller) -0.29%

Delivery month Jul Aug

USD 1400 (s) 1390 (s)

Delivery month Jun-Jul Jul-Aug Aug-Sept Sept-Oct Oct-Nov

USD 1355 (s) 1345 (s) 1335 (s) 1325 (s) 1310 (s)

Delivery month Jun-Jul Jul-Aug Aug-Sept Sept-Oct Oct-Nov

USD 1680 (s) - 1545 (b) 1580 (s) - 1495 (b) 1540 (s) - 1440 (b) 1530 (s) 1530 (s)

Delivery month Jul Aug-Sept OND JFM AMJ

USD 957.50 (s) - 952.50 (b) 880 (s) - 870 (b) 855 (s) - 845 (b) 850 (s) 847.50 (s)

Delivery month Jul Aug-Sept Delivery month Jul

USD 955 (s) 877.50 (s) USD 1310 (s)

Delivery month Jul Rupiah/kg US Dollar/ton—FOB Last closing—US Dollar

USD 920 (s) 9,005 1066.05 1059.19

Delivery month Jul Delivery month Jul

USD 910 (s) USD 1200 (s)

Delivery month Jun Delivery month Jul

USD 880 (s) USD 1450 (s)

Delivery month Jun Delivery month Aug-Sept

USD 870 (s) USD 1550 (s)

Delivery month Jun Jun Delivery month Jul Aug

RM 3650 (s) - 3610 (b) 3620—traded USD 930 (s) 890 (s)

Delivery month Jun Jun

RM 290 (s) 290 (s)

Delivery month Open Last price Prev. settlement Change (US$) Volume
Aug.21 958.25 939.50 949.50 -10.00 271
Sept.21 937.75 917.75 928.25 -10.50 3,036
Oct.21 916.25 901.00 907.00 -6.00 3,061

Delivery month Open Previous settlement Settle Change Volume

Sept.21 6,816 6,742 6,804 62 1,167,513
Oct.21 6,800 6,670 6,734 64 13,418
Jan.22 6,638 6,516 6,574 58 77,047

Delivery month Open Previous settlement Settle Change Volume

Sept.21 7,974 7,830 7,878 48 1,155,655
Nov.21 7,870 7,718 7,790 72 24,245
Jan.22 7,798 7,656 7,710 54 104,859
2
palmoilanalytics.com
ASIA CLOSING MARKET REPORT & SUMMARY OF LAURICS AND STEARIN 21ST JUNE 2021

NEWS & ANALYSIS — Weekly Laurics & Stearin Market update & outlook: 21—25 June 2021
Malaysia CPKO: Prices decline to below 50 day average
Local prices continued to tumble for the sixth week in a row, erasing a
hefty RM36.40 or US$8.80 to end at weekly average of RM284.60/picul—
the lowest in near 7 months. CPKO prices are now RM65 or 18.60% below
the peak of RM350 reached 6 weeks ago and RM45 below the 50 days
rolling average. Malaysia local and Indonesian export CPKO prices fell
steadily tracking CPO futures as production is expected to improve signifi-
cantly in the second half of the year from the lackluster performance in the
first half. CPKO stocks improved noticeably in May rising by 13.30% to the
highest in 4 month as production picked up pace. We expect output to
improve slightly in Jun but exports will be lower resulting in second succes-
sive month of rise in stocks as at end of Jun, but likely to stay below the
stock volume of 275,761 tons recorded in Jun of last year. CPKO supply
will continue to be tight for the rest of this year even as production enters high cycle. Local prices may re-test high of
RM350/picul if CPKO supply do not keep up with headline CPO numbers and subsequently into PK crushing. Outlook: This
week offer prices will be mixed, with expectation of rising to RM300 to low of RM285 (1 ton = 16.5346).
CPKO CIF Rotterdam—Offer prices tumble. Trading awaits for price direction
There was no let up in the decline of Rotterdam CPKO prices after offers
tumbled for the third week in a row erasing US$10-60, with spot month Jun
-Jul down US$60 to US$1370/ton. Back month offers were at US$1310/
ton. We predicted offers to trend lower last week at US$1300-1350/ton.
Product prices were weaker mirroring the general fall in palm and laurics as
production of palm and soft oils are widely expected to move higher. There
was only 1 trade heard concluded at US$1250/ton for Oct-Nov delivery
which is US$60 below the asking price, reflecting ideas of more price falls to come before trading takes place. Overall Rot-
terdam CPKO prices fell US$50 week-on-week average to US$1406/ton and down US$210 from the peak a month ago.
Malaysia CPKO export to Rotterdam will be lower in Jun. The first 20 days of Jun export is just 2500 tons versus 21,429
tons done same time in May. Indonesia recorded zero CPKO exports in May. Outlook: Offers are predicted to hit lower
US$1280/ton for the back month Aug-Nov while front month higher to US$1480/ton. Number of trades will rise.
CCNO CIF Rotterdam—Sharply lower offers, steady trades and wider spread to CPKO
CCNO offers were sharply lower plunging by US$40-90 to US$1640/ton on the front-month and down to US$1530/ton for
Sept-Dec delivery or US$110 discount, compared to US$80 in the prior week. There were 4 trades heard– spot month
done at US$1550/ton or US$90 below the asking price and Sept-Oct at US$1460/ton—this is the lowest traded value in 6
weeks. CCNO offers prices ranged at high of US$1700/ton on spot month on Mon down to US$1640/ton on Fri, tracking
the general weakness in palm product prices in the origin and destination markets as easing supply sentiment is built-in
into the pricing. Overall weekly average price was down US$25 to an average of US$1683/ton, giving up almost half of the
price recovery from the previous week. The slower fall in CCNO versus substitute CPKO widened the spread from US$252
to US$277—to the highest in 6 months. In the origin market, Philippines export prices fell for the fourth week in a row eras-
ing US$34 to US$1562/ton. The Philippines CCNO export continue to trend lower in the Jan-May period by around 31% to
327,293 tons versus the same time last year. Philippines copra production is projected to improve in 2021-22 rising by
200,000 tons to 2.60 million tons from the previous year as yields bounce back. Rising freight cost, strong demand for
oleo-chemical products and shortage of laurics feedstock supply, will keep CCNO prices elevated to the end of this year
and the spread at above US$200. Outlook: Offer prices are forecast to rebound to US$1700-1800/ton this week.

Malaysia Weekly Stearin Market: Declining prices and premium in the week. Rising exports in June.
RBD palm stearin prices fell below US$1000/ton for the first time since Feb, trading between US$945-920/ton, as we
predicted but offers failed to go as low as US$900/ton. RBD palm stearin lost a whopping US$100.50 in the week to set-
tle at weekly average of US$930/ton while RBD palm olein lost US$116.50 to US$948.50/ton, thereby depressing palm
olein premium to stearin to US$18.50 from US$34.50 in the previous week to the lowest in 15 weeks as prices and
spreads fall to multi-months low—tracking weaker CPO futures and plunge in soft oils—soybean oil on CBOT and sunflower
oil cash trade in Ukraine. As palm production moves into higher gear from June and cash prices continue to dwindle more
trades will take place. Declining upstream CPO prices fell by 26% from the peak just a month ago, will offer improved mar-
gin for refiners albeit temporarily as downstream product prices also tumble. Malaysia RBD palm stearin exports in the
first 20 days of Jun was up more than twofold to 63,890 tons driven by more than four-fold rise in shipment to Pakistan
and to China expanding by 45.90% to 35,300 tons. Whereas Indonesia export rose by 25.57% in May to 254,755 tons—
the highest since Jan 2019 from when the data was compiled. Falling prices in Jun will prompt greater buying from Malay-
sia and Indonesia, leading to a likely reduction in stocks as demand outstrip supply. RBD palm stearin by-product will be
higher in Jun after palm olein export is projected to record 6—10% rise from May. In summary stearin outlook for Jun is—
exports to rose faster than production, resulting in lower stocks and rebound in prices but not at above US$1000/ton
from current lows. The price recovery will be subject to CPO upstream production in June and July. Outlook: This week of-
fers are predicted to touch low of US$900/ton with a possibility of testing US$880/ton.

3
 ASIA CLOSING MARKET REPORT & SUMMARY OF LAURICS AND STEARIN 21ST JUNE 2021

DATA
Fundamental palm related data due for the week: 21—25 June 2021
• ITS, Amspec and SGS Malaysia 1-20 June export
• ITS, Amspec and SGS Malaysia 1-25 June export
• SPPOMA June 1-20 June production
• MPOA Malaysia 1-20 June production
• Indonesia June export tax decision
• GAPKI Indonesia May supply and demand data for April

Data released last week

• Benchmark month switched to September 2021 on 16th June. Front month June expired
• ITS Indonesia May export data
• ITS, Amspec and SGS Malaysia 1-15 June export
• SPPOMA 1-15 June June production
• SEA India May vegetable oil import data
• NOPA U.S soybean crush and soybean oil stocks for May
• Malaysia announced July CPO reference price and export tax rate
SPPOMA 1-15 June 2021 vs. 1-15 May 2021 SPPOMA 1-10 June 2021 vs. 1-10 May 2021
FFB yield : -13.63% FFB yield : -13.77%
OER : +0.64% OER : +0.70%
Production : +17.50% Production : -10.08%

Malaysia 1-20 Jun 2021 vs. 1-20 May 2021 export (in mt) Malaysia 1-15 Jun 2021 vs. 1-15 May 2021 export (in mt)
ITS: 945,745 vs. 953,474 (-7,729 or down 0.81%) ITS: 658,900 vs. 685,114 (-26,214 or down 3.83%)
AmSpec: 937,135 vs. 953,860 (-16,725 or down 1.75%) AmSpec: 652,770 vs. 695,764 (-42,994 or down 6.18%)
SGS: SGS: 657,474 vs. 714,014 (-56,540 or down 7.92%)

ITS : Indonesia export 1-31 May vs. 1-30 Apr 2021 (in mt)

Total: 2,957,503 vs. 2,733,225 (+224,278 or up 8.21%)

CPO: 262,675 vs. 419,146 (-156,471 or down 37.33%)

RBD Palm Olein: 1,088,310 vs. 1,151,433 (-63,123 or down 5.48%)

CPKO : zero vs. 2,500 (zero)