Fitch: Sound profiles for Asian palm oil

Fitch Ratings said in a new report that it expects Asian palm oil producers to maintain sound credit profiles in 2010.

Positive factors for the sector include stable crude palm oil prices, due to balanced supply/demand dynamics and declining cost pressures from lower fertilizer costs, Fitch said.

These factors should result in robust profitability and operating cash flow generation for palm oil producers in 2010, the agency said.

Palm oil producers that have favorable plantation maturity profiles and well-managed plantation operations will be the main beneficiaries, including IOI Corp. Bhd. and PT Ciliandra Perkasa.

Both companies have been able to maintain sound financial profiles with robust balance sheets, despite difficult market conditions during the fourth quarter of 2008 and second half of 2009, Fitch said.

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