InfoSAWIT, KUALA LUMPUR – PublicInvestment Bank Bhd (PublicInvest Research) has cautioned that Malaysian CPO exports remain subject to a universal 10% tariff, despite a temporary 90-day pause in retaliatory tariffs between the US and China. This is expected to add a cost burden for consumers in the US.

"The impact of the tariff could lead US food producers to substitute CPO with domestic soybean oil, even though that commodity faces an 84% tariff in China starting April 10," PublicInvest wrote, as reported by the New Straits Times on Thursday, August 7, 2025.

PublicInvest anticipates that the trend of increasing production will continue, but demand will remain weak due to global economic uncertainty. They have maintained a "Neutral" rating for the plantation sector with a projected CPO price of RM4,200 per ton.

Similarly, Hong Leong Investment Bank Bhd (HLIB Research) has kept its CPO price assumption at RM4,000 per ton for 2025 and RM3,800 for 2026. They believe that pricing power will begin to fade as global supplies improve.

"While trade tensions may encourage China to shift some of its vegetable oil imports to palm, the impact is likely to be contained by weak demand and crude oil prices," HLIB explained.

The firm also gave a "Neutral" recommendation for the plantation sector, projecting that CPO stocks will continue to increase in April due to seasonal harvest patterns and low post-holiday demand.

Meanwhile, RHB Investment Bank Bhd (RHB Research) highlighted that current CPO prices are still high due to limited supply and low stocks. Year-to-date, the average CPO price has been RM4,717 per ton.

RHB expects stocks to continue rising in the near term but to remain below two million tons. The firm maintained an "Overweight" recommendation for the plantation sector, confident that the medium-term outlook remains promising despite global challenges. (T2)