Bangkok--26 Jun--Moody's Investors Service Moody's Investors Service has a positive rating outlook for Asia Pacific's rated palm-oil industry over the next12-18 months. In a new report, Moody's says that a rapid rise and continued high prices for crude palm oil (CPO) during the past 18 months have strengthened balance sheets of Asian palm-oil producers, who responded by buying more plantations and increased planting of greenfield properties. The report's lead author, Peter Choy, is a Moody's vice president and senior credit officer. Choy says, "Execution risks from expansion in 2009 are likely to be lower than in the past year." He explains that most issuers are now more inclined to focus on organic growth, to delay their downstream, bio-diesel projects due to higher feedstock costs, and to avoid new purchases amid higher asset prices. Choy says, "The positive outlook for the sector will not necessarily translate into upgrades for rated firms because the market is at a cyclical peak, and some issuers are still integrating earlier expansions or are still small." He adds, "Moody's will also continue to monitor issuers' corporate governance and financial strategies, which affect their rating outlook." The report's second author, Wonnie Chu, a Moody's analyst, says, "Recent regulatory changes may have a negative impact on bio-diesel prospects, but such output accounts for a negligible share of issuers' earnings." Chu adds, "By contrast, a sharp reduction in India's import duty on both refined and crude palm oil should support demand from the Malaysian and Indonesian issuers." Chu also notes that rated palm-oil companies face no imminent refinancing risks and generally have good intrinsic liquidity. The report, entitled "Industry Snapshot: Asian Palm-Oil Producers", is available at www.moodys.com.