Asean CPO stocks battered as palm oil price tanks; further decline expected in H2

CRUDE palm oil (CPO) stocks in South-east Asia are now going through a sell-off in the wake of a drop in the commodity’s prices, after having enjoyed a stellar run amid what analysts term a “perfect storm” of factors like tightened supplies, Indonesia’s export ban and the Russia-Ukraine conflict.

In the Singapore, Malaysia and Indonesia markets, listed palm oil counters have seen their share prices fall across the board since Apr 29, alongside a decline in CPO futures. As at market close on Tuesday (Jul 6), the 22 CPO stocks listed on the 3 exchanges were in the red. 

The price of CPO futures contracts on the Bursa Malaysia Derivatives market has fallen 41 per cent over the same period. Some contributing factors include concerns over slower global economic growth and expectations of higher palm oil output in Indonesia.