Supply and demand of vegetable oils continue to look tight for 1HFY2022, keeping prices elevated, says Hoe. Nevertheless, RHB notes that stock/usage ratios for the major vegetable oil complexes and CPO are expected to improve in 2022, implying that CPO prices should moderate in 2HFY2022.
RHB Group Research analyst Hoe Lee Leng has maintained “neutral” on the plantation sector with a “buy” call on Wilmar International, aside from liking Bumitama Agri on valuation grounds.
In her April 12 note, Hoe says that a trading strategy is best for the sector, in light of the volatility in crude palm oil (CPO) prices. “While supply risks are still imminent from the ongoing war, demand risks are also prevalent given the current demand rationing and possibility of biodiesel mandates being cut,” she adds.
