Malaysian palm oil inventories for June came in below market expectations, with output surprisingly weak given the increase in foreign workers in the first half of 2023.
Reasons for this is not yet clear, but it is likely structural factors are putting pressure on output, which could exacerbate the anticipated El Niño effect on yields.
Reiterate positive view on Plantation sector equities and the price outlook for crude palm oil (CPO). Forecasts maintained.
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