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In the last five trading days, CPO prices fell -3.5% WoW, averaging MYR 4,574/MT, mainly driven by lower oil prices (potentially weakening biofuel demand) and bearish trend in soybean meal prices (CPO’s substitute) on Brazil’s higher production, which is expected to grow +4 million tons, up from +2.5 million tons due to improving weather conditions throughout 2025.
However, CPO prices rose +2.8% during March 4 – 6 as GAPKI announced that CPO exports may fall -6.9% YoY to 27.5 million tons due to stagnant production and tight supply from the B40 implementation. In addition, GAPKI also stated that domestic biodiesel consumption in 2025 could jump +18.7% YoY to 13.59 million tons.
With B40 program and demand pickup in 4Q from India and China to provide support for CPO prices, there remains some upside to our 2025 CPO price forecast of MYR 4,500/MT (YTD: MYR 4,583/MT, +9.1% YoY), despite weather improvement in 2Q to potentially raise production. Stock-wise, NSSS (TP: IDR 350/sh) and TAPG (TP: IDR 1,050/sh) are our top picks, given their young plantation profiles (<10 years), while SSMS (TP: IDR 2,500/sh) could serve as an alpha play on strong earnings growth from robust exports.
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
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The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
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