Plantation Stocks

CIMB Research on 7 Mar 2013

THE key takeaways for us from the Palm Oil Conference are that the crude palm oil (CPO) price could decline in H2 due to a potential record soyabean harvest from South America and the United States, plus higher palm oil supplies and slowing biodiesel demand growth.

However, the current attractive CPO price against crude oil suggests that there is potential for the excess supply today to be diverted to voluntary biodiesel usage to reduce the current stock. A lower CPO price will be negative for pure palm oil players.

We maintain our "neutral" call, and preference for integrated players like Wilmar and Indofood Agri.

NEUTRAL