Crude palm oil prices to stay robust on inventory crunch, but may not lift all SGX agri counters
Higher CPO prices are set to persist; analysts expect Bumitama Agri, First Resources to get a boost
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[SINGAPORE] Crude palm oil (CPO) prices are expected to stay high in 2025 as inventories shrink and output weakens, deepening a supply crunch that could fuel earnings growth for Singapore-listed plantation stocks.
The Malaysian Palm Oil Board’s data released last week showed stockpiles at a low of 1.5 million tonnes as at end-February, due to weak production levels. This marks Malaysia’s fifth consecutive month of declining inventories, underscoring tight supply conditions in the world’s second-largest palm oil producer and exporter.
This reinforced RHB Research’s “overweight” stance on the sector, citing strong pricing power and a projected 12.4 per cent earnings growth for plantation players in 2025, driven by firm selling prices amid tight supply and strong demand.
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