1. Palm Oil Scenario
Globoil New Delhi, India
2nd February 2018

2. "I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite."
G. K. Chesterton

3. Supply and Demand 2017 : Year in Review Ringgit and its impact
Production outlook
Demand growth
End stock 2
Ringgit and its impact 3
Malaysian Refining Industry 4
Sustainability & Traceability 5
Projections for 2018 6

4. EU’S PROPOSAL TO BAN PALM OIL USAGE IN BIOFUEL
2017 – Year in Review
TPPA - Malaysia to enter large duty free market & reduced tariffs, expanding potential markets.
Another roller coaster year for the Plantation industry
INDIA’S IMPORT TAX HIKE &
MYR STRENGTHENING
MALAYSIA’S EXPORT TAX EXEMPTION
HIGHER IMPORT DUTY BY INDIAN GOVERNMENT – export to India was -28% to 2.02 mln MT in 2017
POSITIVE PRICE TREND was SHORTLIVED
APPRECIATION OF THE RINGGIT
SUPPLIES – Production recovered strongly especially during the first 10 months of the year
LOWER DEMAND FROM INDIA – one of the reasons for an increase in MALAYSIA’S NATIONAL INVENTORY (2Y high)

5. CPO CPKO RBD OLEIN 2017 – Year in Review HIGH : RM 3,111
LOW : RM 2,502
CPO
HIGH : USD 510
LOW : USD 230
CPKO
HIGH : USD 760
LOW : RM 623
RBD OLEIN
-21%
-55%
-18%
CCNO-CPKO CIF Rotterdam widened to $190 from $90
Pick up in physical sustainable palm oil demand
Sharp fall in CPKO vs CPO spread
Drop in certificate premiums
Physical CPKO premiums

6. Malaysian Production Change (2016 – 2017)
4Q‘17 FFB yield was at its strongest in three years
Less heavy monsoon rainfall for the period
Ramadan Festival
(2017) Full recovery from the El Nino

7. Indonesia Production Change (2016 – 2017)
Source : Official data from GAPKI
GAPKI’s recent announcement for 2017 :
Palm Oil output : 38.2 Mln MT vs 32.5 Mln MT (+18%)
Exports : +23% to 31.5 Mln MT from 2016
End stocks at 4.02 Mln MT as at end December 2017

8. Combined Production : Malaysia & Indonesia
In 2017, Malaysian production recovered 15% to mln MT while Indonesian production is expected to grow by 11% to 37 mln MT

9. PRODUCTION Outlook in 2018

10. Export Trend : Malaysia
Palm oil exports grew 3% yoy in 2017, as stronger demand by China & Pakistan were offset by weaker EU and US demand

11. Export Trend : Indonesia
GAPKI expects palm oil exports from Indonesia to grow by 23% to Mln MT in 2017

12. Malaysian End Stocks Scenario
Highest level seen at 2.90 Mln MT in Nov 2015
Malaysia's palm oil stocks rose 7% MoM & 64% YoY to 2.73 Mln MT as at end December 2017

13. Indonesian Inventory 2017 end stocks: 3.2 – 3.4 Mln MT
Lower production growth contributed to the decline in their national inventory

14. Impact of Ringgit on Palm prices
Ringgit trend for the past 30 days
High : (1st Jan 2018)
Low : (28th Jan 2018)
Strengthening of the Ringgit dampened demand for palm - YTD ringgit has strengthened almost 14% against the USD (from 4.5 level in January 2017 – 3.87
current level)

15. Challenges for Malaysian Refining Industry for 2018 ?
Good refining margins throughout the year
Higher STEARIN values contributed to the positive margins
PFAD prices = CPO
OLEIN at premium level to CPO
Upon India’s duty hike announcement the industry margin scenario changed completely
Ringgit appreciation & suspension of export tax for Q1 added onto the challenging Biz environment
Challenges for Malaysian Refining Industry for 2018 ?

16. Sustainability and Traceability

17. PROJECTION FOR 2018… 1
THE BULLS AND BEAR 2
MARKET PRICE CONSENSUS

19. INDONESIA BIODIESEL MANDATE
REVISIT OF ANY WEATHER UNCERTAINTIES - Supply distortion etc
CPO EXPORT TAX SUSPENSION (JAN-APR 18)
SUPPORT FROM CRUDE OIL PRICES

20. AMPLE GLOBAL SOYBEAN SUPPLY Increased Global oilseed production
STRONG RM TO USD
AMPLE GLOBAL SOYBEAN SUPPLY
Increased Global oilseed production
INDIA’S IMPORT TAX
OVERSUPPLY SITUATION
FUTURE REVISION

21. AVERAGE PRICE CONSENSUS FOR 2018 :
Polls on 2018 PRICE Outlook
AVERAGE PRICE CONSENSUS FOR 2018 :
RM 2,630

22. "Don't let the fear of losing be greater than the excitement of winning.“
Robert Kiyosaki

23. HAVE A