Visit our Website for full post and our view on plantation industry: https://jawplace.com/industry-overview-plantation-the-next-trend/
The question that we have to ask is can CPO price sustain at the
current price? Or will it fall back. The Plantation industry has never
been a long term investment due to a number of factors, such as
currency, El Nino, La Nina, CPO production, demand for CPO, trade war
and government policy. Hence, each of the factors will have an effect on
the CPO price as well as the profitability of the plantation companies.
We have decided to analyse if CPO Price can sustain at above 2600/ 2700
level for the next couple of months or will it go beyond 3000?
We have done some research and have shared on some of the past data for
investors to decide and what should investors be aware of when
investing in a plantation company; and identifying the trend before even
everyone does (basically, don’t get into a FOMO – fear of mission out
situation).
Understand the correlation between USD and CPO Price. USD has been
depreciating against MYR since the beginning of April 2020. Based on
historical data, whenever there is a drop in USD against MYR, CPO price
will tend to trend upwards. For instance, back in December 2020, when
USD depreciated from 4.25 to 4.10 against the MYR, CPO price climbed to
RM 3,000.00 per tonne.
Upon understanding the reason why CPO Price is increasing steadily and
by analysing some of the above factors, we will be a more informed
investor and could estimate what will be the CPO price moving forward.
Subsequently, we will proceed to do a review on some of the plantation
companies in Malaysia in terms of their production efficiencies and some
basic fundamentals.
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https://klse.i3investor.com/blogs/JawResearch/2020-09-03-story-h1513312356-Industry_Overview_Plantation_the_Next_Trend.jsp
