The Edge Malaysia (08/04/2026) - KUALA LUMPUR (April 8): Malaysia’s plantation sector is poised for a stronger earnings cycle as tighter regional supply controls and rising biodiesel demand continue to underpin crude palm oil (CPO) prices, according to recent sector research reports. 

Thailand’s move to tighten CPO export controls from April 7 is expected to lend near-term support to CPO prices by limiting supply availability in the global market.

Under the new measure, exporters must obtain prior written approval for each shipment to safeguard domestic supply amid rising local consumption and biodiesel demand. 

While Thailand accounts for only a relatively small share of global palm oil exports, analysts said the policy reinforces a broader regional trend of prioritising domestic energy security and food supply, particularly as higher crude oil prices improve biodiesel economics.

Research houses have subsequently raised their CPO price assumptions for 2026 and 2027, with estimates now ranging between RM4,300 and RM4,500 per tonne, compared with earlier forecasts of around RM4,000.

The firmer outlook is expected to benefit upstream plantation players, particularly those with sizeable Indonesian exposure. Kuala Lumpur Kepong Bhd (KL:KLK), IOI Corp Bhd (KL:IOICORP) and SD Guthrie Bhd (KL:SDG) were highlighted among the key proxies to capture the upside from stronger CPO prices and biodiesel-led demand.

TA Research maintained its 'overweight' call on the plantation sector, citing tighter inventories, improving biodiesel profitability and supportive policy developments across major producing nations.

However, analysts cautioned that risks remain, including a potential easing in geopolitical tensions that could drag crude oil prices lower and weaken biodiesel economics, as well as softer edible oil demand from major importing countries such as India and China.

Still, the sector’s near-term outlook remains constructive, supported by what analysts described as a structurally stronger demand base for palm oil.

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