calvintaneng

IS EL NINO GOOD FOR OIL PALM PLANTATION

Before I answer that, what do you think El Nino did to the padi field in Kedah or Perlis? Price may shoot up, but production is zero. Lets talk about palm oil now. WIthout going into prices, during El Nino, most animal suffers and some even cannot withstand such heat and died. If it is not good for animal in the long run, do we think it is good for oil palm trees in a longer run? Is like, say, it attack my bacteria, and it cannot produce so much and the yield drop, it needs time to rehabiliate before it can reproduce as much as during a good time. Now, replace "bacteria" with "El Nino"

Here is how I look at it immediate effects (disregard what analysts said):

Before El-Nino

Produce 100 tonnes @ RM2400 = RM240,000

During El-Nino

Produce 87 tonnes @ RM2,700 = RM234,900 x 5% (export tax) = RM223,115

Let us not bring currency into the equation. So, what say you? Good or Bad?

Calvin replies:

Today I met a 77 Year Old Oil Palm Plantation Owner.

These are the facts.

Young Palm Oil trees if well taken care of will fruit by 3 years old. But FFB will increase more & more by 4 to 5 years old.

The most fertile years are between 8 to 10 years old.

By age 15 more fertilizer is needed to support FFB production.

Oil Palm trees can last as long a 25 years old. But since they have grown so tall by then it is hard for harvesting.

So best is cut down & replant the trees by age 23 to 24.

Now there are 2 seasons for FFB. Usually Between January to June there is less FFB. But from July to December there is abundant harvest.

Fertilizer must be applied 4 times a year - about 3 months once to keep trees tip top.

Now he expects from July to December to have abundant FFB (Fresh Fruit Bunches)

Will Hot El Nino destroy Oil Palm trees like they destroy padi and maize?

According to him, "NO". In all his experience Oil Palm trees can survive hot weather though FFB production might be redeuced.

Prices of FFB according to his experience

It ranges from Rm300 a tonne to Rm1,000 a tonne.

So current CPO prices can Go As High as Rm4,000 a tonne or even more.

Since experts have called this current El Nino as "THE GODZILLA OR MONSTER EL NINO" you can even expect CPO prices to reach Rm6,000 a tonne.

If SO all predictions are out!

PRICES WILL SKYROCKET LIKE CRAZY.

As future is still unknown can we trust the experience of this 77 Year Old Oil Palm Uncle?

I met him as a stranger in AEON. He just shared that he is into Oil Palm planting.
That's why I probed for all his answers.

Anyone got better knowledge?

2016-04-06 20:24

OPMS

calvin, CPO price expectation first 3K -> 4K -> 5K. Now... 6K ?

2016-04-06 20:30

calvintaneng

Posted by OPMS > Apr 6, 2016 08:30 PM | Report Abuse

calvin, CPO price expectation first 3K -> 4K -> 5K. Now... 6K ?

Since this is called MONSTER EL NINO - CPO Might Shoot Pass Rm6,000 a tonne to Rm10,000 a tonne

SEE

Strongest El Niño in 100 years! Here are some predictions ...
www.weathertrends360.com/.../Strongest-El-Nio-in-100-years-Here-are-...
Jul 29, 2015 - El Niño is simply an Equatorial Pacific Ocean cycle of warmer than ... the worst of Winter weather to shift into Europe and Asia this year with the ...

2016-04-06 20:33

OPMS

wow, lets see how high CPO could reach.. been holding some plantation stock since late 2015..

2016-04-06 20:35

calvintaneng

What Should We Call the Monster El Niño?

What Should We Call the Monster El Niño?

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This week, we learned that the 2015 El Niño may end up being most powerful on record, eclipsing three other major El Niño years over the past century. So....why doesn’t this beast of a weather phenomenon have a goddamn name yet?

We’ve thrown out a lot of monikers for the hot blob that’s been stewing across the Eastern Pacific these past months, contributing to droughts, floods, algal blooms, coral die-offs, and massive tropical storms. The Godzilla El Niño. The Bruce Lee Chris Farley El Niño. Sauron, the Necromancer, etc. But we want to know what you’re calling it. We want a name that commands respect, strikes the fear of God into you, sends you running off to Costco to purchase a lifetime supply of canned beans.

The World Meteorological Organization has been naming tropical storms since the 1950s. It’s crazy, and frankly, rude, that we don’t do the same for El Niño years. Help us correct this wrong in the comments below.

2016-04-06 20:55

sosfinance

I seriously don't know how much drop in production, but, that is based on another expert, it says 10-15%. I used 13% based on one expert said. I suppose it depends on where exactly they are planted. One of the reason prices goes up is because inventory is expected to fall 13% during El Nino. If there is no effect on production, then, he is not an expert. Lets confirm this "expert" based on historical records during El Nino (on production not price).

Other facts: export tax 5% & foreign workers levy also went up.

2016-04-06 22:09

sosfinance

Palm oil output in Malaysia, the world's second-largest producer, is estimated to fall by 2 million tonnes from a year earlier in the oil year ending September 2016 due to the effects of El Nino, leading industry analyst Dorab Mistry said. (Malaysia production in 2015 is about 20 million tonnes).

So, technically speaking, it is conservative to assume production will drop 10%. As for whether how much it will go up, it will depends on more factors, i.e. speculators, Indonesia production, currency, sentiment, etc. I am not estimating the price of palm oil, like share price, can go up or down based on sentiment and many other factors.

2016-04-06 22:53

crocodile1980

Well said sos,its all about supply demand. Price up bcoz of production expect to drop since you say production will not affected much base on what the price will still going up, and then whats else correlate to this el nino.

2016-04-08 17:55