Malaysian plantation stocks snap three-day losing streak as palm oil prices stay elevated
04/06/2026 (The Edge Malaysia), Kuala Lumpur - Malaysian plantation stocks rebounded broadly on Thursday after three consecutive days of decline, amid expectations of stronger palm oil prices from tightening supply.
United Plantations Bhd (KL:UTDPLT) rose nearly 4% to RM31.30 while the Bursa Malaysia Plantation Index, which tracks 39 stocks in the sector, outperformed the broader market and jumped to its highest level in nearly two weeks.
The recovery was driven mainly by higher prices of substitute soybean oil, which improved palm oil’s relative pricing and supported export demand, said David Ng, the senior trader at proprietary trading firm IcebergX.
“The current discount to soybean oil is making palm oil relatively cheaper, improving export demand,” he said, adding that the recent hot weather spell may also weigh on production outlooks and underpin palm oil prices.
Shares of the top three plantation firms by market capitalisation gained at least 3% each. SD Guthrie Bhd (KL:SDG), the world’s biggest palm oil producer by acreage, climbed to RM6.04 while IOI Corporation Bhd (KL:IOICORP) advanced to RM4.18 and Kuala Lumpur Kepong ended at RM20.20.
Meanwhile, CIMB Investment Bank has upgraded its call on the plantation sector to "overweight", citing improving CPO price prospects and tightening global supply.
Responding to a query from The Edge, CIMB IB said the sector's recent weakness presents an opportunity for investors to increase exposure, adding that global palm oil supplies remain constrained while competing vegetable oil markets are also facing supply challenges.
While Indonesia's implementation of its B50 biodiesel mandate and the rollout of a new export control agency could create near-term competition for Malaysian exporters, CIMB IB said the impact may be temporary given the early stage of the policy changes.
It said Indonesia may prioritise domestic palm oil supplies to meet biodiesel demand, potentially reducing export availability and creating opportunities for Malaysian producers to capture additional market share.
Reflecting its more constructive outlook, CIMB IB raised its average CPO price forecast to RM4,400 a tonne for 2026 and RM4,500 for 2027, while expecting a stronger performance from plantation companies in the second quarter.
Prices of the edible oil used in everything from infant formula to detergents have gained about 14% from the end of February when the geopolitical conflict in the Middle East broke out. A rally in crude oil prices has also driven demand for the vegetable oil’s use in the production of biodiesel.
The benchmark palm oil futures was trading at RM4,599 on Bursa Malaysia Derivatives on Thursday.
Apart from geopolitical risks, the Malaysian Palm Oil Council has flagged risk to production from the rising El Nino phenomenon that typically brings drier-than-normal weather and shrivel palm trees in Malaysia and Indonesia.