CPO Output Falls in February, Sector Outlook Neutral

KUALA LUMPUR — Malaysia’s crude palm oil (CPO) production softened in February, falling 19% month-on-month to 1.28 million tonnes. Peninsular Malaysia recorded the steepest decline of 135,000 tonnes, followed by Sabah (-89,000 tonnes) and Sarawak (-67,000 tonnes), largely due to wetter weather affecting fresh fruit bunch yields. Despite the monthly drop, production rose 8% year-on-year. Analysts expect output to trend higher later in the year, peaking between September and October, with a full-year forecast of 20.7 million tonnes.

CPO Output Falls

Exports also fell 23% month-on-month to 1.13 million tonnes, though up 13% year-on-year, reflecting seasonal factors. Closing stocks stood at 2.7 million tonnes, up 79% year-on-year. Indonesia’s biodiesel mandate remains fluid, with a possible B50 rollout in 2HCY26. Rising oil prices are expected to support CPO prices, though geopolitical uncertainties persist. Sector outlook has been revised to Neutral, with dividend plays like Hap Seng Plantations and Sarawak Plantations highlighted. – Apex Research

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