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Malaysia: Lack of catalysts forecast for palm oil sector

RBD Palm Oil
Published Apr 18, 2024

Tridge summary

Hong Leong Investment Bank Bhd Research (HLIB Research) has issued a 'neutral' outlook on the plantation sector, pointing to a lack of significant demand catalysts and expectations that the high palm oil prices currently seen will not be sustainable in the long term. The report notes the small price difference between palm oil and soy oil, due to expected seasonal output recovery and weak demand, alongside referencing the US Department of Agriculture's projections for corn and soybean planting areas. Despite the sector's overall neutral rating, HLIB Research has identified IOI Corp Bhd and Hap Seng Plantations Holdings Bhd as top picks within the sector, recommending them as 'buy' with specific target prices.
Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

Hong Leong Investment Bank Bhd Research (HLIB Research) has maintained its “neutral” call on the plantation sector as the absence of a notable demand catalysts has indicated that current high palm oil price will not be sustainable in the long term. In a report, HLIB Research said palm oil’s narrower price discount against soy oil is due to impending seasonal output recovery and the lack of demand, among other factors. The research firm noted the US Department of Agriculture’s National Agricultural Statistics Service’s prospective planting report revealed that US farmers plan to plant 90 million acres of corn and 86.5 million acres of soybean in the planting season. The projected corn planted area came in slightly below the average trade estimates of 91.8 million acres, while the projected planted area for soybean came in within ...
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