The 2 stocks
May 21st, 2019
⏰ 1 minute read
⏰ 1 minute read
Stocks
If you’re a listed palm oil company, there’s 2 types of stocks. The first is of course the stock as in the shares which are listed on the stock exchange. This one has not been doing so great. The second one is usually very important to the the palm oil price, that’s the level of stocks or palm oil inventories. How are they doing?
Stocks
The simple answer is they’re doing well. Our EHP stocks have fallen to low levels & the benchmark measure of stocks in Malaysia has also come down. Late last year Malaysia was at over 3m tons. In April this has come down to 2.7m & looks like it’s falling rapidly. Amazingly stocks have not now materially increased since 2012! The market is tight.
Price
So far this has had little or no impact on the maker prices of palm oil. But as we’ve mentioned several times, the longer futures prices have remained much higher. Now it looks as if the spot price is starting to catch up. Based on the level of stocks, it looks like the price should rise quickly back towards early 2018 levels.
Proft
That would be RM2500 or Rp9m. Ex tax for us that’s Rp8.1m, which was our selling price at the beginning of last year. 12 month fruit production is now at equivalent 450k tons a quarter. That production & that price with current costs is this calculation (450x23%x8.1)-490-370 =+32. Fruit to oil to revenue add kernel - cash costs - (interest & depreciation) = pre tax profit...
400
The last time we reported profits was in the first half of 2015 when we had just become Eagle High Plantations. The share price in those months was between Rp300-400. The current environment for one type of stocks should be very good for the other type of stock & your stocks,
Sebastian
If you’re a listed palm oil company, there’s 2 types of stocks. The first is of course the stock as in the shares which are listed on the stock exchange. This one has not been doing so great. The second one is usually very important to the the palm oil price, that’s the level of stocks or palm oil inventories. How are they doing?
Stocks
The simple answer is they’re doing well. Our EHP stocks have fallen to low levels & the benchmark measure of stocks in Malaysia has also come down. Late last year Malaysia was at over 3m tons. In April this has come down to 2.7m & looks like it’s falling rapidly. Amazingly stocks have not now materially increased since 2012! The market is tight.
Price
So far this has had little or no impact on the maker prices of palm oil. But as we’ve mentioned several times, the longer futures prices have remained much higher. Now it looks as if the spot price is starting to catch up. Based on the level of stocks, it looks like the price should rise quickly back towards early 2018 levels.
Proft
That would be RM2500 or Rp9m. Ex tax for us that’s Rp8.1m, which was our selling price at the beginning of last year. 12 month fruit production is now at equivalent 450k tons a quarter. That production & that price with current costs is this calculation (450x23%x8.1)-490-370 =+32. Fruit to oil to revenue add kernel - cash costs - (interest & depreciation) = pre tax profit...
400
The last time we reported profits was in the first half of 2015 when we had just become Eagle High Plantations. The share price in those months was between Rp300-400. The current environment for one type of stocks should be very good for the other type of stock & your stocks,
Sebastian
