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Palm oil stock levels to remain high until year end, RHB maintains 'neutral'

Khairani Afifi Noordin
Khairani Afifi Noordin11/11/2022 01:37 PM GMT+08  • 2 min read
Palm oil stock levels to remain high until year end, RHB maintains 'neutral'
Given the recent price increase, the tax levy in Indonesia may be reapplied sooner than expected. Photo: Bloomberg
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RHB Group Research analyst Hoe Lee Leng is maintaining her “neutral” rating on the plantation sector, following expectations of high stock levels until the end of the year which may restrain crude palm oil (CPO) prices.

In her Nov 11 note, Hoe points out that Malaysia’s palm oil output rose by 2.4% m-o-m in October, while inventory rose by 3.7% m-om to 2.4 million tonnes, despite exports rising 5.7%.

“Although we understand that there has been a trickle of foreign workers coming into the country, it is not enough to alleviate the significant shortage of labour. As such, we expect Malaysia’s peak output season to remain lacklustre for the rest of the year,” says Hoe.

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