Singapore plantation stocks weak as new China guidelines to ease price pressure on consumers fuel concerns of softer CPO demand, prices. 

 

Statement from China’s State Council Wednesday says Beijing will seek to tame rising food, energy prices. “We view the price control guidelines by the Chinese government as short-term negative for CPO prices as they may weaken import demand and prompt traders to liquidate their speculative positions,” says CIMB. 

 

Expects Wilmar (F34.SG), in particular, to be hurt as profit margin for its consumer products may be squeezed if price controls slapped on branded cooking oil. But remains bullish longer term as price controls, plan to improve subsidies for consumers will keep food products affordable, ensure strong demand growth for meat, edible oils in China.

 

Wilmar off 1.9% at $6.19, Golden Agri-Resources (E5H.SG) off 2.7% at $0.71, Indofood Agri (5JS.SG) off 1.1% at $2.63 vs STI off 0.4%.