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31 January 2025

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Palm Oil Weekly (24 – 30 January 2025): Avg. CPO MYR 4,511 (+0.9% WoW)

  • In the last three trading days, CPO prices increased +0.9% WoW, averaging MYR 4,511/MT, largely influenced by adverse weather in Malaysia and Brazil.
  • According to the Malaysian Palm Oil Association, the country’s CPO output in the first 25 days of January is projected to decline nearly 19% MoM. Recent heavy rainfall has caused flooding in Sabah and Sarawak, disrupting palm oil production and distribution, which should lead to CPO price support.
  • Prolonged drought in Brazil led to weaker-than-usual rainy season, impacting the production of soybean oil, CPO's closest substitute. This has boosted demand for CPO, with Brazil’s drought conditions expected to persist through at least 1Q25.
  • Given the above conditions, our set 2025 forecast of MYR 4,500/MT (YTD: MYR 4,505/MT), up 7.2% YoY, may see upside, particularly also helped by 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.

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CPO - 24 - 30 January 2025

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CPO - 24 - 30 January 2025

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