Recent Catalysts Driving the Price

• In the last five trading days, CPO prices increased +1.4% WoW, averaging MYR 4,555/MT, as the planned B40 implementation in Indonesia continues to tighten global supply outlook.
• Despite earlier gains, CPO prices have been trending down since 14 January, dropping on 16 January to MYR 4,468/MT, mainly due to two factors: 1) -15% MoM decrease in CPO export of Malaysia, the world’s second-biggest grower, during the first half of January with shipments to India and China plummeting 56% and 72% respectively; 2) > 3% decline in rapeseed oil prices in China amid surging oil inventories (Dec-24: 470,500 MT, +15% YoY) in the country, further pressuring CPO prices.
• In FY24, avg. CPO price reached MYR 4,199/MT (SSI: MYR 4,190/MT). For FY25, we set our forecast at MYR 4,500/MT (YTD: MYR 4,520/MT), up 7.2% YoY, on the back of B40 program and CPO’s defensive nature. Stock-wise, NSSS (TP: IDR 350/sh) and TAPG (TP: IDR 1,050/sh) are our top picks due to their young plantation profiles (<10 years), allowing for higher crop and extraction yields.