Perfect storm for oil palm stocks?
Khairul Khalid | 10 Nov 2017 00:30
The fluctuation in CPO price caused by shifts in the weather is quite normal in the industry

Crude palm oil (CPO) price is trending up again. From RM2,578 per tonne on June 22, it rose to RM2,767 on Nov 8 and is poised to breach the RM3,000 mark soon.

And that’s good news for listed oil palm stocks, with many of their share prices rising gradually in recent months. Felda Global Ventures Holdings Bhd (FGV) has gained 8% since June 22 to RM1.89 on Nov 6, Sime Darby Bhd has risen 5.4% and IOI Corporation Bhd is up 2%.

TA Ann Holdings Bhd and United Malacca Bhd are also up 7% and 17% respectively during the same period. There could be cheer for shareholders if CPO price continues its uptrend.

Unpredictable weather conditions, especially with La Nina phenomenon possibly wreaking havoc and promising a very wet season the next few months, could push CPO price higher leading into 2018.