Plantations: Expecting CPO Price Momentum to Sustain in 2H (Overweight)

Malaysia’s CPO stocks rose to a 5-month high in July as production continued to pick up amid weaker domestic consumption.

Despite a stronger production, we expect CPO prices to hold up in 2H26 amid concerns over weaker palm oil yields in Malaysia and Indonesia due to El Niño development, which could peak towards the year-end. YTD, CPO price averaged at RM4,380/mt.

CPO Price

“We are currently reviewing our average CPO price assumption of RM4,400/mt for 2026-2027.  MaintainOverweight on the sector, and our top pick is Ta Ann given its high dividend yield of 6.8% and above-industry-average FFB production growth,” says analysts from PIB.

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