Koon Yew Yin, 21st Nov 2024

Indonesia is the biggest palm oil producer in the world. Indonesia plans to implement biodiesel with a mandatory 40% blend of palm oil-based fuel from Jan. 1 next year, a senior energy ministry official said recently, lifting prices of the vegetable oil to a more than two-week high.

Indonesia currently uses B35, which has a 35% blend of palm oil-based biodiesel, and the government had previously said it would increase the blend to 40% next year.

When implemented, the B40 mandate could increase biodiesel consumption to up to 16 MM kilolitres (kl) next year from a forecast of 13 MMkl this year, the energy ministry has estimated.

B40 will boost Indonesia's palm oil use for biodiesel to 13.9 metric MMt, from the estimated 11 MMt needed this year with B35, Indonesia's biofuel producers association APROBI had previously estimated.

As a result, CPO price is rising so rapidly as shown by the CPO price chart below:

Just after the stock market closed today, MHC reported increased profit. Its EPS was 3.50 sen for the quarter ending June. Its EPS increased by 1.50 sen or 44% to 5.12 sen per share.

It is the cheapest plantation stock based on PE ratio. Moreover, some part of its oil palm plantation is located in Telok Intan which can be converted for property development.