Palm oil analyst Mistry urges Indonesia to resume exports immediately

Palm oil analyst Mistry urges Indonesia to resume exports immediately
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Updated 26 May 2022

Palm oil analyst Mistry urges Indonesia to resume exports immediately

Palm oil analyst Mistry urges Indonesia to resume exports immediately
  • Farmers in Indonesia were already burdened with higher levies and taxes of $575 per ton compared to their Malaysian counterparts who pay $125 per ton, Mistry said

KUALA LUMPUR: Leading edible oil analyst Dorab Mistry on Thursday urged Indonesia to immediately resume exports of palm oil, warning that a halt in shipments pending details of a domestic sales rule could spell economic “doom” for farmers.

Mistry, director of Indian consumer goods company Godrej International, is a prominent figure in the palm oil industry and his market-moving outlooks are closely watched by traders.

In an open letter to the Indonesian government shared with some international media outlets, Mistry said the world’s biggest palm oil producer and exporter was heading to a “calamitous situation” as inventories had already reached historical highs surpassing seven million tons.

“If unrestricted exports do not start before the end of May we foresee a situation where all storage tanks will be full and the industry will grind to a halt,” he said, adding that Indonesian farmers would bear the brunt of this.

Indonesia reopened exports of crude palm oil and its derivatives from May 23 after a three-week ban on shipments in a bid to curtail runaway cooking oil prices.

But President Joko Widodo reinstated a policy of mandatory local sales at a certain price level, and exporters have held back on shipments as they await details on the latest rules.

Farmers in Indonesia were already burdened with higher levies and taxes of $575 per ton compared to their Malaysian counterparts who pay $125 per ton, Mistry said.

“But now they face the incredible situation of not being able to harvest their fruit and instead will be forced to watch it rot on the trees,” he said.

The losses are “inevitable” and would be seen in early June even if exports commence immediately, exacerbated by the start of a boom in production due to good rainfall, Mistry said.

“The export ban has also forced countries to look at their reliance on Indonesian palm and find ways of making soft oils available at a cheaper price,” he said, citing India’s decision to allow duty-free imports of crude soyoil and crude sunflower oil.

“The combination of historical record stocks, full storage tanks, boom cycle in production, poor demand, and restricted exports spells almost certain doom for the Indonesian farmer,” Mistry warned.

He said a “complete economic disaster” for farmers could only be avoided if the government adopted an immediate unrestricted export policy, which he described as a win-win solution for both farmers and buyers alike.

Indonesian government officials did not immediately respond to a request for comment.

The administration of President Joko Widodo has been focused on trying to bring down the price of cooking oil derived from palm oil in the domestic market. 


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RIYADH: Saudi Arabia’s Advanced Petrochemical Co. saw its profit decline by 37 percent during the first half of 2022, hit by higher raw material prices.

The Jubail-based company’s profit dropped to SR274 million ($73 million), compared to SR436 million for the same period a year earlier, according to a bourse filing.

The decline was propelled by a rise in propane and outsourced propylene prices by 51 and 20 percent, respectively, and a decrease in profit share from its South Korean unit SK Advanced Co. by SR75 million.

This was coupled with an increase of 174 percent in offshore logistics costs, despite a 24-percent higher sales volume.

Sales of the Saudi-listed petrochemical producer surged to SR1.68 billion during the six-month period.

In a separate announcement, Advanced Petrochemical said it will distribute a cash dividend of SR142.53 million at SR0.55 per share for the second quarter of the year on Sept. 18. 

 


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RIYADH: Saudi Arabia's main index, TASI, fell 0.77 percent to 11,257, its lowest level at the opening bell in 2022 amid rising investor concerns of a possible global recession.


US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m

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US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m

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RIYADH: Tyson International Holding Co., a wholly-owned subsidiary of New York-listed Tyson Foods, has reached an agreement to acquire equity stakes in two of Tanmiah Food Co.’s subsidiaries for SR262.6 million ($70 million).

Tyson will acquire 15 percent of shares in Agricultural Development Co. and 60 percent of shares in Supreme Foods Processing Co., according to a bourse filing.

In partnership with Tyson, Tanmiah will double its production capacity and develop new halal products for the international market, expanding its product portfolio and enhancing its supply chain and procurement processes.

The agreement with Tyson will also strengthen and boost the Tanmiah brand in the Gulf Cooperation Council and other regions.

With SR20 million in registered capital, Agricultural Development Co. rears and produces broilers, feed mills, and operates hatcheries. It also raises fresh chicken.

Supreme Food Processing Co. produces pre-prepared chicken and beef products. It has a registered capital of SR8.6 million.


Advanced Polyolefins secures $1.6bn loans for 3 plants at Jubail Industrial City

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Advanced Polyolefins secures $1.6bn loans for 3 plants at Jubail Industrial City

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RIYADH: Advanced Polyolefins Industry Co., a unit of Saudi-listed Advanced Petrochemical, has secured loans worth SR6.1 billion ($1.6 billion) to finance the construction of three plants at Jubail Industrial City II in Saudi Arabia.

The Shariah-compliant facility deals are repayable in 22 installments until November 2035, while SR956 million of the amount is payable by May 2026, a bourse filing revealed.

The company said the proceeds will be used to set up three plants for propane dehydrogenation, polypropylene, and isopropanol, with a capacity to produce 843,000, 800,000, and 70,000 tons per annum, respectively.

Alinma Bank, Al Rajhi Banking and Investment Corp., Arab National Bank, and the Saudi National Bank were among the financing entities for the facilities. 


Saudi-listed shipping firm Bahri closes $1.04bn sukuk issuance

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Updated 06 July 2022

Saudi-listed shipping firm Bahri closes $1.04bn sukuk issuance

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RIYADH: National Shipping Co. of Saudi Arabia, better known as Bahri, has completed the issuance of SR3.9 billion ($1.04 billion) sukuk, denominated in Saudi Riyals and maturing in seven years.

The offering, led by Al Rajhi Capital, HSBC Saudi Arabia, and SNB Capital, started by mid-June, and the settlement was done on July 5, the firm said in a bourse filing.

The Saudi-listed company earlier said it will use proceeds to refinance the existing sukuk which will mature this month.

Bahri is a joint venture between Saudi Aramco and the Public Investment Fund, operating a fleet of 89 tankers and container ships that transport oil, petrochemicals, and other types of cargo.