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06 September 2024

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Palm Oil Weekly (06 September 2024): CPO MYR 3,935 (-3.4% WoW)

  • CPO prices declined -3.4% WoW, averaging MYR 3,949/MT, as some regular CPO consumers shift towards soybean oil as an alternative on higher production resulting in lower price spread.
  • The shift towards soybean oil has intensified as its price premium over CPO has narrowed to almost zero, down from 12-month high of USD 565, mainly due to the -15% decline in prices YTD vs. +7% increase in CPO prices.
  • Meanwhile to increase export, the Indonesian government, based on the current CPO reference price, is considering to lower the export levy from 10.7% to between 3% and 7.5%. Additionally, the current 6.2% export duty may also be cut. However, both reductions are pending the ministry of finance revised regulation (MoF Ruling No. 39, 2022).
  • On the back of recent lower soybean prices, we may have to cut our FY24 CPO price forecast of MYR 4,100/MT. Nevertheless, for now our top picks remain with NSSS (TP IDR 265/sh) and TAPG (TP IDR 800/sh), supported by relatively young plantation profiles (<10 years old), reflecting higher crop and extraction yields.

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CPO - 06 September 2024

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CPO - 06 September 2024

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