by hariesha Fri Oct 17, 2014 11:26 pm
My feeling is plantations will be in RED or in minor profits in September quarter.
There are two factors to consider in Tea profitability. Crop and Price. Last three months was not good for Tea. Less crop with lessor prices prevailed.
Normally winter buying is starting in the month of September. This year it didn't happened either. Only in October we saw some good prices with improved buying. But in last two auctions low grown prices came down by considerable margins, mostly because lessor demand in Mid East. Next quarter will be a more difficult one. In addition to mid east crisis, Russian currency is falling. Continually shrinking oil prices will erode buying power of Mid-East and Russians.
Early 2014 I published an earnings forecast on RPCs with oil palm, probably in the other forum. ELPL, WATA, NAMU and AGAL. AGAL exposure to palm oil is negligible. I think these plantations outperformed the rest during last six months.
Rubber sector, no point of discussing now as no signs of recovery yet.
So those who wants to be in plantations I recommend RPCs with exposure to Oil Palm, but better avoiding plantations.
A plantation rally - For a rally no need of fundamentals. When some body push one others will follow. But don't expect rally's with good results.
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