Malaysia: Monsoon season drives continued decline in CPO production

Published 2024년 12월 11일

Tridge summary

The article highlights the upcoming decline in crude palm oil (CPO) production due to the monsoon season and typical seasonal drop in output, with heavy flooding in key regions potentially pushing December stocks down further. Despite tight supplies, analysts predict a 'neutral to negative' price response due to higher-than-expected stock levels and price premium over competing edible oils. However, planters are expected to report stronger earnings in 4Q2024 and 2025, supported by higher CPO prices and increased production from Indonesia. Notable market players, including Hap Seng Plantations Holdings, Sarawak Plantation Bhd, and IOI Corporation Bhd, are expected to benefit from the rally in CPO prices.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

KUALA LUMPUR (Dec 11): Crude palm oil (CPO) production is projected to decline further in the coming months due to the ongoing monsoon season and the typical seasonal drop in output, according to analysts. Malaysian palm oil inventories fell 2.6% month-on-month to 1.84 million tonnes in November 2024, slightly above consensus estimates of 1.8 million tonnes, but in line with projections by CIMB Securities. However, production challenges from heavy flooding in key regions could push December stocks down another 7% to 1.7 million tonnes, and according to CIMB, CPO production is also expected to decline by 13% month-on-month in December to 1.41 million tonnes. Despite tight supplies supporting CPO prices, analysts anticipate a “neutral to negative” price response due to higher-than-expected stock levels and the current price premium over competing edible oils. The research house noted that the record price premium over soybean oil (US$147/tonne) and rapeseed oil (US$87/tonne) is ...

Source: Theedgemarkets