MARKET DEVELOPMENT
Maybank IB retains ‘positive’ call on regional plantations
Maybank IB retains ‘positive’ call on regional plantations
14.02.2022 (www.malaymail.com) - KUALA LUMPUR, Feb 14 — Maybank Investment Bank Research (Maybank IB) has maintained its ‘positive’ call on the regional plantation sector, based on expectations that the crude palm oil (CPO) average selling prices (ASP) would stay elevated in the first quarter of 2022 (Q1 2022).
In a note today, the research house said CPO prices were expected to remain lofty due to the tight supply of vegetable oils globally.
According to the Malaysian Palm Oil Board, stockpiles in January 2022 fell by four per cent month-on-month (m-o-m) to 1.55 million tonnes.
Maybank IB said the seasonal decline in January output resulted in tight supply.
“CPO ASP in January 2022 hit new a high of RM5,355 per tonne, partly due to weaker-than-expected South America crop outlook.
“The heavy rainfall in the past two months appeared to have a relatively muted impact on overall production in January," it added.
In terms of demand, exports were generally lower m-o-m to all key export markets, except Turkey, Vietnam, the Philippines and Bangladesh.
“The lower m-o-m output and exports were compensated by higher CPO and palm kernel ASPs which averaged RM5,355 per tonne (+6.0 per cent m-o-m, +43 per cent year-on-year (y-o-y)) and RM4,423 per tonne (+11 per cent m-o-m, +73 per cent y-o-y), respectively, in January," it said.
The research firm said Malaysian exporters are likely to temporarily benefit from Indonesia's new export policy and export permit that came into effect Jan 28, 2022.
"Overall, we expect February’s exports figures to be encouraging despite the record palm oil prices currently and lesser working days in February versus January,” it said, adding that it has placed a ‘buy’ call on Kuala Lumpur Kepong Bhd, Sarawak Oil Palm Bhd and Boustead Plantations Bhd. — Bernama