Palm Oil Prices Likely to Moderate in 2H

Dow Jones
Aug 11

0307 GMT - Crude palm oil prices are expected to moderate in 2H, mainly due to seasonally higher production and elevated Malaysian inventories, TA Securities analyst Angeline Chin says in a note. However, prices are expected to remain above 4,000 ringgit a ton, supported by Indonesia's biodiesel program, firmer soybean oil prices and stronger U.S. biofuel feedstock demand, she says. Festive restocking by key importing countries in late 3Q could help absorb part of the seasonal supply increase, while a strengthening El Nino remains an upside risk, although its impact on palm oil production is likely to emerge with a lag, she adds. TA Securities maintains an overweight rating on Malaysian plantation sector, pegging SD Guthrie, Kuala Lumpur Kepong, IOI, United Malacca and Kim Loong Resources at buy.

 

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