Global Palm Resources blames this for delay in plantings

It has just added 33 ha.

According to OCBC, Global Palm Resources (GPR) has added just 33 ha of new plantings in 3Q12, bringing the YTD total to 292 ha. According to management, the delay was due to the “increasingly more difficult” negotiation process with the local population.

Here's more from OCBC:

As a result, GPR has slashed its new planting target for 2012 to about 300-400ha, or more than 60% versus its initial target of 1000 ha. Note that GPR also slashed its planting target last year from 1.6-1.7k to 1.0k ha.

Currently, it has about 2.6k ha available for planting. GPR adds that it is still exploring various opportunities for acquisitions, and it expects the process to be easier now with the drop in CPO (crude palm oil) prices.

GPR is currently sitting on about IDR247.5b of net cash (as of end Sep).

Meanwhile, we note that GRP has ended with significantly higher ending inventory of CPO of 3.4k tonnes at end Sep, versus 1.1k tons at end Jun. Management attributed the large increase to market uncertainty over the past few months and also the high production of CPO since Aug; this resulting in a “wait –and-see” approach by buyers in a “downward trending market”.

While GPR said that it has started to clear the excess inventory, the continued high production of CPO (which is likely to continue into Feb) could see its stock pile inching higher in 4Q12 and even 1Q13.