The case for crude palm oil.

Some of us might be aware of the criticisms made against oil palm plantations in Malaysia and Indonesia.  The following paragraph from an article in the New Straits Times summed it up nicely:

"Environmental non-governmental organisations and parliamentarians in the EU and US allege that the new demand for palm oil in their newly developed biofuel industry will lead to deforestation in Malaysia and Indonesia to accommodate the expanding cultivation of oil palm. The alleged conversion of forests is then linked to habitat loss, biodiversity and now global warming. " By Yusof Basiron, 24 Feb 2007, New Straits Times.

The Malaysians have launched very convincing counter arguments to the contrary.  Here, I would like to share a short video clip found on YouTube:



There is some truth to the claims that Western developed economies seem to be practising double standards in their criticisms of oil palm plantations.  Some figures shown in this next video clip are quite telling:



The developing world has the right to economic growth, growth which the Western developed economies enjoyed at the expense of the developing world in the past.  If they want the developing world to cut down on what they call environmentally detrimental practices, they should make appropriate contributions.  To me, this seems to be the decent thing to do.

Golden Agriculture, AusGroup and Genting SP.

Golden Agriculture failed to move higher today and closed at 54c.  It formed a bearish black candle and with stochastics closer to the overbought region, it doesn't look promising.  On the brighter side, although it has closed lower, it is still above the rising 50dMA.  The 20dMA is turning up.  MFI has formed a higher low and the next session will see if it could continue to do so.  I continue to see resistance at 59c and strong support at 50c. 

AusGroup too formed a black candle as it closed at 58c, supported by the 20dMA.  This is on the back of significantly lower volume.  With the MFI forming a higher high, there might be some momentum left in the upmove.  For stale bulls who missed out on reducing their exposure here in the last couple of sessions, there might still be a chance to do so yet.  Strong resistance is at 63c.

Genting SP continues to weaken as expected.  The highest it got to this week was 98c to give stale bulls a chance to reduce exposure.  Closing at 91c today hugs the lower limits of the Bollinger bands.  The downtrend seems ready to continue as the MFI continues to decline indicating reducing buying momentum.  In the unlikely even that the price moves up in the next session, resistance is at 98c.

Looking at the weekly chart, we see a precarious situation.  Price is hugging the lower limits of the Bollinger bands and the MFI continues to decline just like in the daily chart.  However, what is important is that it has closed below the rising 50wMA which is at 92.5c.  If price is unable to recapture this support level to close at or above 92.5c in the next session, which is the last trading day of the week, the chart would look very ugly.  The ultimate downside target would be 74c, a support level provided by the rising 100wMA.  Although there would be intial support at 80c, such a potentially huge fall in price would be too tempting for short sellers to ignore.