Markets
Looming challenges for plantation stocks
Stephanie Jacob | 02 Feb 2018 00:30
A strengthening ringgit keeps downward pressure on CPO prices, according to Pong
The plantation sector has failed to excite given the presence of several notable headwinds that are expected to affect export growth and impact crude palm oil (CPO) prices.
 
The unexciting outlook on export growth and CPO prices will also likely impact investor enthusiasm for plantation-related stocks, says Inter-Pacific Research Sdn Bhd head of research Pong Teng Siew. He believes that “plantation sector stocks will not see the return of favourable investor appeal before H2FY18.”

Late last year saw a move by India to increase its customs duty on CPO and refined palm oil imports by almost double. The Indian market is the largest importer of Malaysian palm oil.

Then in mid-January, the European Union Parliament’s environment committee announced that it would endorse a legislative campaign to remove palm oil from its list of designated renewable fuels by 2020 due to environmental considerations.