KUALA LUMPUR: Malaysian palm oil stock is projected to fall one per cent month-on-month (m-o-m) to 2.78 million tonnes in February 2026, as an estimated 20 per cent m-o-m decline in exports is expected to more than offset lower output, according to CIMB Securities Sdn Bhd.
Meanwhile, the brokerage forecast palm oil production to decline by eight per cent m-o-m to 1.45 million tonnes in February.
According to Amspec, palm oil exports fell 10.5 per cent m-o-m to 451,340 tonnes in the first 10 days of February.
In January 2026, the average crude palm oil (CPO) price fell 0.6 per cent m-o-m to RM4,018 per tonne, which is broadly in line with its 2026 CPO price forecast of RM4,000 per tonne.
CIMB Securities said CPO prices improved in late January despite high palm oil stocks, Indonesia’s decision to defer the B50 biodiesel mandate and a stronger ringgit.
“This was likely driven by higher soybean oil prices, new guidelines for Section 45Z biofuel production credit, and concerns that dry weather in Peninsular Malaysia could hurt production.
“Malaysia announced cloud seeding operations in Johor, Kedah and Perak over Feb 11-15, 2026, in response to prolonged hot weather,” it said in a note today.
As such, CIMB Securities maintained an “overweight” stance on the sector, with land monetisation as a key catalyst.
Meanwhile, Hong Leong Investment Bank Bhd said higher restocking activities ahead of major festivals, coupled with seasonally lower output, lifted CPO prices by three per cent to RM4,111 per tonne since early-January, bringing the year-to-date average to RM4,062 per tonne.
“We maintain our 2026 CPO price assumption of RM4,200 per tonne and our earnings forecasts for now, pending a review following Indonesia’s recent move to delay the implementation of its B50 mandate,” it said.
The investment bank also recommended an “overweight” call on the sector, with top picks being SD Guthrie (“buy”; target price (TP) of RM6.49) and Hap Seng Plantation (“buy”; TP of RM2.57).
“We favour SD Guthrie for its ongoing efforts to diversify earnings drivers, particularly through expansion into renewable energy and industrial property developments by leveraging its prime landbank; improving balance sheet and decent dividend yield of three to four per cent.
“Meanwhile, we like Hap Seng Plantation for its solid balance sheet and high operating leverage to CPO price movement, positioning it well to benefit from high CPO prices,” it said in a separate note. – BERNAMA
