26/08/2007 (Thomson Financial), MUMBAI - Fitch Ratings revised its outlook on PT Ciliandra Perkasa to positive from stable, citing support from crude palm oil (CPO) prices and Ciliandra's improving CPO production.
The agency also affirmed the company's foreign currency and local currency issuer default ratings at 'B+'.
The benchmark international price of CPO (Rotterdam cif monthly average price) increased to 478 usd per tonne in 2006 from 422 usd per tonne in 2005. The benchmark increased further in 2007, hitting a peak of 811 usd per tonne in July and averaging 703 usd per tonne during the first seven months. The higher price is underpinned by the increase in demand for vegetable oils from bio-fuel manufacturers. Fitch expects that demand for CPO as a substitute for other vegetable oils is likely to remain strong in the next few years, resulting in buoyant CPO prices.
However, the agency added that Ciliandra's ratings are constrained by its aggressive capital expenditure programme until 2009, amounting to 126 mln usd.