Wednesday, January 11, 2012

Plantation Stock

I like the Palm Oil farm, it's the gift from Mother Nature - the resource which can grow and sell with high price. It can make into cooking oil, margarine and various oleochemicals. Malaysia having the world's largest plantation company - SIME Darby, which produce 5% of global production. Beside, there are many others small to medium size plantation company listed at Bursa as well.

A friend ask, "Do you buy Plantation Shares?" I say, "Yes"
Then he ask again, "Do you plan to sell it, as it's almost at the high price now?", I say, "No, because I plan to keep it for long term."

Yes, the world's economy may not stable right now, many news from Europe, especially about the financial crisis. But, who care... let say, today you own a Plantation Company that produce very good income for you, do you sell the farm today because worry about tomorrow's news?

You can check the Palm Oil's price at this web: http://www.palmoilhq.com/
We do not know Market will up or down tomorrow, so just forget about it.
I don't know if tomorrow Palm Oil's price will up or not... but i know, if I own a good plantation, with hard working and honest farmers, the future's earning will increase and making profit.

As long as you don't pay too high to own it, the Stock Market's pricing fluctuation is an advantage for us.
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Some figure:
1. Production cost for CPO is about RM1,500 per ton. Average CPO price for the past 2 years was above RM3,000, this is ample of profit margin!
2. It take 3 years for palm oil tree to bear fruit and will continue for the rest of 13 years.
3. Don't forget after 16 years, the land's price will increase as well, then the owner can decide if want to replant or develop the land for other purpose.
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