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20 September 2024

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Palm Oil Weekly (20 September 2024): CPO MYR 3,948 (+0.3% WoW)

  • In 12-19 September 2024, CPO prices rose +0.3% WoW, averaging MYR 3,905/MT, driven by concerns on lower Malaysia’s CPO production. At this stage, we retain our FY24 average forecast at MYR 4,100/MT (YTD: MYR 3,986/MT).
  • Preliminary estimates suggest that production in Malaysia fell 4% MoM during the first half of September due to dry weather. Recent rallies in soybean oil prices also supported CPO prices. Soybean oil, although still trading at a discount to CPO, gained +5% within the space of four days.
  • To increase exports, the Indonesian government reduced its export levy to 7.5% (current: 8.1-16.8%)  with MoF Regulation No.62/2024, effective from 21 Sept. The levy for processed palm products has also been lowered to 3-6%.
  • This export levy reduction will benefit upstream CPO players like TAPG (TP IDR 800/sh) and NSSS (TP IDR 265/sh), which are our top picks, supported by their relatively young plantation profiles (<10 years old), which should translate to higher crop and extraction yields.

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CPO - 20 September 2024

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CPO - 20 September 2024

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