Regional Plantation - RHB Invest 2024-04-16: March Exports Rebounded

• Top Picks are pure planters Ta Ann, Sarawak Oil Palms (SOP), Bumitama Agri (SGX:P8Z), and PP London Sumatra Indonesia (LSIP).
• Despite stronger Malaysian palm oil (PO) output in March of +10.6% m-o-m, PO inventory continued to weaken to 1.72m tonnes (-10.7% m-o-m) due to a strong 28.6% m-o-m rise in exports. We expect PO inventory to remain below the 2m tonne mark for the next few months.
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March production increased 10.6% m-o-m

• March production increased 10.6% m-o-m (+8% y-o-y), as output picked up post the shorter February month. The m-o-m output increase came from Peninsular Malaysia and Sabah, which saw +15% and +10.5% m-o-m growth, but slightly offset by Sarawak at -0.4% m-o-m.
• On the other hand, the y-o-y increase was mainly driven by the spike in Peninsular Malaysia production at +19.1% y-o-y, followed by Sarawak (+3.5% y-o-y), but offset by Sabah (-9.3% y-o-y).
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Malaysia exports improved m-o-m after four consecutive months of decline

• Malaysia exports improved m-o-m after four consecutive months of decline, rising 28.6% m-o-m in March (-11.4% y-o-y), bringing year-to-date exports to -1.6% y-o-y. The rebound in exports performance was likely supported by the festive season as well as some restocking activities.
• As at end-February, China’s and India's stocks were at 15% and 13% below historical levels, while Bangladesh's stock levels were 12% above historical levels.

Inventory levels continued to decline by 10.7% m-o-m

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Hoe Lee Leng RHB Securities Research | Singapore Research RHB Invest | Indonesia Research RHB Invest | https://www.rhbgroup.com/ 2024-04-16 SGinvestors.io

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