Anglo-eastern Plantations Share Discussion Threads

[34adsaddsa] 26/4/2022 11:41

With the fall in the market cap + fall in the £ vs $ and Rupiah + super strong CPO prices, I think we must be getting on for 2/3 of the market cap in cash.

[tigerbythetail] 25/4/2022 13:09

www.bloomberg.com/news/articles/2022-04-25/palm-oil-jumps-almost-5-as-top-shipper-indonesia-to-ban-exports
Ban already being limited to some products only...

[tigerbythetail] 25/4/2022 08:38

Hi34!
The Indonesian coal export ban earlier this year lasted about 4 weeks. Basically, the government threw its weight around to ensure that the domestic market got enough cheap coal for power generation, and then exports resumed.
I think the same thing will happen with palm oil - heads will be cracked together, and the government will get what it wants, and then exports will resume. It's in everybody's interests to find a workable solution.
All in all, I agree with your 2-4 week timeline.

[34adsaddsa] 25/4/2022 05:08

"India imports around 0.6 million tonne of palm oil, 50% of which comes from Indonesia and the remaining from Malaysia, said Sandeep Bajoria, chief executive of Sunvin Group, a Mumbai-based vegetable oil brokerage and consultancy firm. The total monthly export is around 1.1 million tonne. If the 0.3-million-tonne flow is affected, it will push up prices further, he said. “Consumers will have to consume less edible oil. After sunflower oil prices went up, they started consuming palm oil. Now there is no alternative, since palm oil is the cheapest oil,” he said.

Bajoria said the ban may not last more than a month since Indonesia already has 5 million tonne of palm oil and produces another 4 million tonne every month. It consumes only around 1.4 million tonne and has surplus of 2.3 million tonne every month, and not enough storage, he said. Edible oil prices in India are likely to go up by Rs 10 per kg, he said.

BV Mehta, executive director, Solvent Extractors Association of India, said India should activate its diplomatic channels to prevent this “catastrophe”.

“Already sunflower oil supplies were hit due to the Russia-Ukraine war. Now if palm oil supply is disrupted then prices will skyrocket. Prices were already high and Indonesia’s decision will add to the pressure and hurt supplies,” he said.

Indonesia produces 48 million tonne of palm oil annually. The local consumption, including a biofuel mandate, is 17 million tonne, so it has around 31 million tonne for export. This issue could have been managed in a much better manner rather than suspending exports worldwide, Mehta said.

Sudhakar Desai, president, Indian Vegetable Oil Association, raised doubts about the sustainability of Indonesia’s decision, as the country may find it difficult to handle the huge quantities of palm oil it produces.

“Indonesia exports nearly 20 lakh tonne of palm oil per month. Given the storage constraints in Indonesia, I don’t think they would be able to sustain after fifteen days. After meeting its requirements and improving the supply chain, I think it would relax this intended ban,” he said.

The inflationary pressure in Indonesia is consequent of its own policy of supporting the domestic biofuel industry of 8 million tonne of oil, he said.

Prices in India have already gone up by 3.3% in 24 hours and are likely to go up by 10 to 15% in the short term. The next one month is going to be difficult not only for India but for the rest of the world as well, Desai said."

Two estimates. One of 15 days, another of a month. It really is like Saudi Arabi stopping oil exports. It's not going to last.

[skanjete2] 23/4/2022 10:26

This news doesn't matter.
It's just a symptom from the fact that Indonesia doesn't extend new planting permits anymore since 2018.
Things are exacerbated right now because of the Russo-Ukranian war, but it indicates that higher CPO prices are here to stay for the forseeable future.

In that case, the real revaluation of AEP is still to come...

[kenzo1966] 23/4/2022 10:23

After eid al fitre is done ,all is going back to normal i think.

[dixi] 23/4/2022 09:46

Well it's a commodity everybody wants, so whilst this is not an ideal situation, there is huge demand for the stuff. Agree this will only be temporary, but it's hardly as though sales are stopping. Presume investor jitters hit the price though?

[rimau1] 23/4/2022 08:28

Export ban is far from ideal although it will only be a temporary measure, wonder why MP Evans was unmoved? Fortunately AEP can address any impact of this in the upcoming trading update. Worth looking at DKL too which will benefit from the even greater rise in the CPO with global supply restrictions increasing.

[tigerbythetail] 22/4/2022 14:59

You did better than me - 804p was my best price!

[tonytyke2] 22/4/2022 14:49

Well TBTT did manage to get some at 785p, let's see how that goes. share price all over the place.

[jqb1] 22/4/2022 14:44

Alot of nervous hands in this stock?

[tigerbythetail] 22/4/2022 14:43

Hi ntv!
I assume the market is reacting to the Indonesian export ban headlines, but I don't know it for sure, of course.
Share price is still seesawing wildly.

[ntv] 22/4/2022 14:35

and I thought somebody had got an inside view of the trading statement!!!!
It will push up international prices considerably again and then they will raise taxes again
I guess there will be a lot of illegal exporting as the price difference between domestic prices and export prices

[tigerbythetail] 22/4/2022 13:59

Note how MPE share price hasn't reacted at all.
I think news headline triggered automated selling triggered cascade of stop losses = buying opportunity.
Ban will send CPO price through the roof and will be rescinded as soon as some heads have been knocked together and the domestic market receives its discounted oil.

[stemis] 22/4/2022 13:57

Seems an overreaction and I'd expect the price to recover. I think they'll come under a lot of pressure to reverse the ban (what about companies that have contracts to supply?). Local price will still be robust.

[tigerbythetail] 22/4/2022 13:51

hxxps://news.mongabay.com/2022/04/indonesian-trade-official-palm-oil-execs-charged-in-cooking-oil-crisis/
Try this as well. But I reckon this may well be a buying opportunity...

[tonytyke2] 22/4/2022 13:42

Now sells at 792p....?

[tonytyke2] 22/4/2022 13:36

Crikes, what's just happened in the last 10-15mins?

[rimau1] 21/4/2022 07:34

Interesting commentary in the MP Evans results call regarding labour shortages and its impact on Palm Oil prices.

MP Evans executive chair Peter Hadsley-Chaplin explained in last month’s analyst call,“labour shortages in Southeast Asia linked to Covid-19 had already hit supply.

“So, with the restrictions, lockdown restrictions and quarantine measures, it made it very difficult for the Malaysian palm oil industry, which was already struggling with its labour, to operate efficiently and effectively,” he said. This meant harvesting and other essential work could not be done. “That’s an ongoing issue,” he added.

“The rise in the price of palm oil dwarfs the additional cost of inputs and labour [for producers],” said Peel Hunt analysts Charles Hall and Clyde Lewis.

[gaiusgracchus] 20/4/2022 08:46

We all know it's obviously cheap based on fundamentals. We all also know that it's cheap because the board appears to be unconcerned about the share price or about sensible capital allocation. It would be nice if that changed.

[skanjete2] 19/4/2022 17:33

The best way to value this company is based on the assets : EV/#hectares.

We know the value of a hectare of prime CPO palms based on the private market (in normal times at least 15.000US$/ha, now probably considerably higher).

Taking into account the minorities and surplus cash, AEP is currently valued at between 5.000US$/ha and 5.100US$/ha. And they have almost 7 mills!

So in terms of stock appreciation, I think we still have some way to go...