Floods to affect crude palm oil production

THE severe floods in several northern states in Peninsular Malaysia will negatively impact the harvesting, transportation and processing of palm oil from these areas, CIMB Research said.

As a result, crude palm oil (CPO) output for this month may post a larger month-on-month decline, it said in its report yesterday.

CIMB Research said it is too early to assess the exact impact of the flooding on CPO output as it will be dependent on the severity and length of the ongoing monsoon season.

However, it expects the event to lift CPO prices in the near term.

Among the planters under CIMB Research’s coverage, Felda Global Ventures Holdings Bhd has the highest estates exposure in the Malaysian states impacted by floods so far.

It has kept its “neutral” rating on the plantation sector.

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