The Star (12/08/2026) - PETALING JAYA: The plantation sector is expected to remain resilient into the second half of financial year 2026 (2H26) and going into 2027, with crude palm oil (CPO) prices expected to stay elevated despite seasonal supply growth.

Average CPO prices are likely to stay above RM4,000 a tonne, with tighter supply, biodiesel mandates and potential El Nino effects providing support to earnings and margins.

TA Research maintains an “overweight” stance on the sector, with an average CPO price assumption of RM4,300 a tonne for 2026. It expects prices to moderate in 2H26 as production and Malaysian inventories rise, although it does not foresee a sharp correction.

“Although the recent strength in global vegetable oil prices has provided some support to CPO, we believe the increasing supply would continue to cap further price upside,” TA Research said.

The research house expects Indonesia’s biodiesel programme to support domestic palm oil consumption, while firmer soybean oil prices and stronger US biofuel feedstock demand should underpin the broader vegetable oil complex.

It also sees festive restocking by key importing countries towards the end of the third quarter helping to absorb some of the seasonal supply increase.

RHB Research is likewise “overweight” on the sector, maintaining its CPO price assumptions at RM4,400 a tonne for 2026 and RM4,500 a tonne for 2027.

Hong Leong Investment Bank Research (HLIB Research) also maintains an “overweight” rating, expecting elevated CPO prices to hold through 2H26 on tightening supply conditions and resilient demand.

“We continue to favour planters with predominantly upstream operations and greater exposure to Malaysia, given their higher earnings leverage to CPO price strength and lower exposure to foreign regulatory and policy risks,” HLIB Research said.

It noted that year-to-date CPO prices had averaged RM4,380 a tonne, while maintaining its 2026 and 2027 average price assumptions at RM4,450 and RM4,300 a tonne respectively.

Read more at https://www.thestar.com.my/business/business-news/2026/08/12/planters-can-brace-for-stronger-upstream-revenue