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25 October 2024

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Palm Oil Weekly (25 October 2024): CPO MYR 4,477 (+2.9% WoW)

  • In 18-24 October 2024, CPO prices rose +2.9% WoW, averaging MYR 4,477/MT and touching its highest level since July 2022 at MYR 4,688/MT, mainly driven by concerns regarding tight supply outlook from Indonesia and Malaysia, which collectively account for over 80% of global production. Further production declines are expected during the monsoon season in November and December, providing additional price support.
  • Due to rising biodiesel demand (c. 40% of CPO usage), Gapki estimates that Indonesia’s 2024 CPO output will drop to 51mn tons, down from 54.8mn tons in 2023, with reserves projected to decline to 2.5mn tons by year-end, below the ideal 3mn tons. Malaysia has also experienced production challenges, particularly in the southern peninsula, where production fell 6.3% MoM in the first 20 days of October.
  • At this stage, we retain our FY24 average forecast at MYR 4,100/MT (YTD: MYR 4,024/MT), with NSSS (TP IDR 265/sh) and TAPG (TP IDR 800/sh) as our top sector’s picks, supported by their relatively young plantation profiles (<10 years old), reflecting higher crop and extraction yields.

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CPO - 25 October 2024

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CPO - 25 October 2024

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