Plantations sector ‘neutral’ over demand uncertainty

SINGAPORE (Dec 13): OCBC is “neutral” on the palm oil sector and keeping its “hold” on Golden Agri Resources and Wilmar International given signs of ample supplies and some uncertainty over demand.

In a Monday report, lead analyst Jodie Foo says CPO prices have recorded strong year-to-date gains on declining production and tightening inventories in the wake of El Nino and a depreciating Ringgit.

The recent higher crude oil prices and soy oil prices in the near term could also give a lift to CPO prices. Over the weekend, non-OPEC producers agreed to join supply cuts by more than 500,000 barrels a day , and Saudi Arabia announced it is ready to cut oil production more than what they committed to on Nov 30.

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