What is the average CPO price in July, and how does it compare year-on-year?

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Average Crude Palm Oil Price in July Decreased Year-on-Year

In July, the average Crude Palm Oil (CPO) price stood at RM3,845 per tonne. This figure represents a 10.6 per cent decrease when compared to the same period in the previous year.
Factors Influencing CPO Price

The CPO price experienced some support during July. This was attributed to Russia's withdrawal from the grain deal, which can impact global food supply dynamics, and the ongoing effects of the El-Nino event, a weather pattern known to influence agricultural yields.
Outlook for CPO Price

While the conflict between Russia and Ukraine may provide some support, potentially keeping CPO prices within the RM3,600 to RM4,200 range, a decline is anticipated. This expected decrease is largely due to the upcoming months being characterized by high crop seasonality, a period when palm oil production typically increases.
Sector Recommendation

Despite the fluctuations in CPO prices, MIDF Research has maintained its "neutral" stance on the domestic plantation sector for the second half of 2023. This outlook is based on the observed normalisation of CPO prices and weaker demand from key importing nations.
Specific Company Recommendation

Within the sector, MIDF Research has reiterated its "buy" recommendation for Kuala Lumpur Kepong (KLK). The target price for KLK remains unchanged at RM26, a decision supported by the company's high oil yield per hectare and its superior fresh fruit bunches (FFB) yield compared to its industry peers.

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What is the average CPO price in July, and how does it compare year-on-year?

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