Firm CPO outlook keeps plantations sector upbeat

BIMB Research has maintained an "Overweight" call on the plantations sector, projecting crude palm oil (CPO) prices to stay firm in 2H 2026 at RM4,200–RM4,800 per tonne, with an average of about RM4,500 per tonne. Key tailwinds include tighter biodiesel blending mandates globally, a more constrained palm oil supply-demand balance, and El Niño risk in 2H 2026 that could curb output. Sector core net profit fell 7% year-on-year in 1Q26, but BIMB expects earnings momentum to improve sequentially from 2Q26. Indonesia's new export regulatory framework has come into effect, though the near-term impact on covered companies' profitability is expected to be limited.

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