We believe Malaysia’s relatively high palm oil inventory of more than 2m tonnes will not weigh on crude palm oil price in the immediate term given the larger concerns over South America’s soybean planting season. Soybean prices will, however, eventually retreat if demand remains lackluster, especially from China. As we continue to believe that palm oil will be in abundant supply this year, we maintain our average palm oil price expectation at RM3,000 per tonne. We are Neutral on the sector.
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