The company told Bursa Malaysia yesterday that revenue for the current quarter improved year-on-year (y-o-y), mainly due to higher fresh fruit bunch (FFB) production from Indonesia, apart from the higher sales of refined palm products.
KUALA LUMPUR: PublicInvest Research said European negotiators' softer stance on palm oil regulation give more time for major palm-oil producing nations like Malaysian and Indonesia to seek further negotiations.
Europe has withdrawn its earlier demand for restrictions on the use of palm oil by 2020 as a complete phase out of biofuels only occurs by 2030, it said.
"Parliament’s new proposal suggests that contribution from biofuels produced from unsustainable food or crops for transportation usage should not exceed its average from 2014-2018, with maximum of 7% of total transport consumption.
"In our view, this implies a cap of biodiesel blend at B7 level. It short, the use of palm oil in biodiesel would be capped at B7 level until 2023 and gradually reduce to zero by 2030. The proposal initiated by the EU negotiators would need approval by EU ministers and the European Parliament plenary," said the research house.
PublicInvest added that CPO prices, which fell to a 22-month low recently before recovering to RM2,336 per metric tonne, could continuously come under pressure in 2H due to stronger production.
Inventories are likely to rebound after five straight months of declines, it said.
PublicInvest maintained its neutral outlook on the sector following its downwards revision in CPO price outlook from RM2,500 per metric tonne to RM2,350 per metric tonne.
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