First, we need to discuss about the phase of palm oil because it is very important for us to understand the cycle of palm oil. So, total stages of palm oil are three, that are Cultivating （培育）, Harvesting（收获）and Processing（处理）.
This stage is including selection and plantation of seeds. During the progress of selection, there may approximately cut off 7% of failed seeds and after others 93% seeds are being selected successfully and then required 6 months to grow up. From this stage to next stage is required between 3 to 5 years to proceed to next stage.
The planted seeds are growing up to palm oil tree and this palm oil will continue to mature. As the palm oil continues to mature, their yield also will increased and those of them generally reach peak production between their 7th to 18th years of growth. Besides that, the palm oil able to produce fruit for harvest within 4 to 6 years of planting. Here present of one term which always used by media on the fruit, that is FFB (Fresh Fruit Bunch).
Here is the stage of farmer maintain the quality of palm oil, there are consist a lot of strategies and I think this is not related with the trend of palm oil discussed so I am just skip it.
Ok, here the summary of above three stages. Company required to use 3 to 5 years to enable the palm oil planted is going to the harvest stage. Harvest stage of company will boost the sales and net profit, so we need to know the date of initial stages to estimate probably on the harvest stage.
Besides that, we also need to understand two key point, that is raining season would make fresh fruit's yield going faster in harvest stage while hot season is suitable for growing stage of palm oil. So, normally end of the year will be the raining season (this is the reason flood always happened in end of the year) and this will boost the sales for quarterly report in October to December.
Furthermore, do you know any product which made by the palm oil? The picture above will show you the way. All of the product can find easily in the supermarket and it is play an important role in our daily life. On the other hand, our country Malaysia is ranking number two for the palm oil plantation country. So actually the public listed plantation company may take few advantages in Malaysia because all of the export of palm oil to other country is depending to all of this public listed company. In my opinion, I am suggesting invest the plantation company which high market capitalization because they are linked close relationship with government and plays leader role in plantation sector. Example of plantation blue chip companies are IOICORP and KLK, both of this company valued approximate RM 25 billion.
So, this article is about what I am understood about the fundamental of palm oil. In future, I will keep updating this article every moment that I know the new knowledge about palm oil. Thanks for read ya ^_^
PS: Next article will discussing the data statistic of palm oil.
待续。。。《油棕の功课 Palm Oil's homework (二)》