Home News Broker's Calls

Uncertainties abound in the plantation sector amid tightening supply and demand of vegetable oils

Khairani Afifi Noordin
Khairani Afifi Noordin4/12/2022 11:36 AM GMT+08  • 4 min read
Uncertainties abound in the plantation sector amid tightening supply and demand of vegetable oils
A trading strategy is best for the sector in light of the volatility in CPO prices, says RHB Group Research analyst Hoe Lee Leng.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

RHB Group Research analyst Hoe Lee Leng has maintained “neutral” on the plantation sector with a “buy” call on Wilmar International, aside from liking Bumitama Agri on valuation grounds.

In her April 12 note, Hoe says that a trading strategy is best for the sector, in light of the volatility in crude palm oil (CPO) prices. “While supply risks are still imminent from the ongoing war, demand risks are also prevalent given the current demand rationing and possibility of biodiesel mandates being cut,” she adds.

Supply and demand of vegetable oils continue to look tight for 1HFY2022, keeping prices elevated, says Hoe. Nevertheless, RHB notes that stock/usage ratios for the major vegetable oil complexes and CPO are expected to improve in 2022, implying that CPO prices should moderate in 2HFY2022.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.
Unlock unlimited access to premium articles with less than $9 per month. Subscribe Now