Plantation sector downgraded due to negative factors

HLB research lowered its average CPO price assumptions by RM150 and RM200 per tonne to RM2,350 per tonne in 2020 and RM2,400 per tonne in 2021 to reflect its less sanguine view on the demand outlook for palm oil.

PETALING JAYA: The potential impact of the Covid-19 pandemic, coupled with the fall in crude oil prices resulted in HLIB Research downgrading the sector to “neutral” from “overweight”, and revising its crude palm oil (CPO) price assumptions downwards.

The research house, in a note, said the near-term tight supply of CPO will no longer be able to mitigate the impact of these factors on CPO prices.