MARKET DEVELOPMENT
Alliance Keeps \'Underweight\' Call On Plantation Sector
Alliance Keeps \'Underweight\' Call On Plantation Sector
22/04/2013 (Bernama) - Alliance Research has maintained its "underweight" call on the plantation sector, and expects another volatile year for the sector this year with CPO prices averaging at RM2,600/mt.
In a note Monday, the research house said a healthy production outlook coupled with trailing exports is likely to keep CPO prices subdued in the interim.
"Continued competition from Indonesian exports will also be negative for Malaysian exports," it said.
It was reported earlier that both Malaysia and Indonesia would be on a level playing field next year with regards to exports to the European Union (EU).
"While Malaysia is being dropped from the EU Generalised Scheme of Preferences (GSP), it was reported that Indonesia would also lose its GSP privileges from 2014-2016.
"We view the news positively over the long term as it bodes well for Malaysian palm oil exports in 2014," Alliance Research said.
In a note Monday, the research house said a healthy production outlook coupled with trailing exports is likely to keep CPO prices subdued in the interim.
"Continued competition from Indonesian exports will also be negative for Malaysian exports," it said.
It was reported earlier that both Malaysia and Indonesia would be on a level playing field next year with regards to exports to the European Union (EU).
"While Malaysia is being dropped from the EU Generalised Scheme of Preferences (GSP), it was reported that Indonesia would also lose its GSP privileges from 2014-2016.
"We view the news positively over the long term as it bodes well for Malaysian palm oil exports in 2014," Alliance Research said.