The brokerage adds that it is relooking at its CPO price forecasts of RM2,650 per tonne for 2021 currently.
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“As such, share prices may also not react too significantly on the back of this fear,” RHB analysts Hoe Lee Leng, Christopher Andre Benas and Juliana Cai write in a Jan 8 note.
According to RHB, the main factor to watch out for is the weather.
The brokerage notes that the impact of dry weather on the South American soybeans could influence the movement in CPO prices.
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Moreover, the large price gap between CPO and other soft oils, as well as the gap between energy and vegetable oil prices may not be sustainable, it adds.
RHB has maintained its “neutral” rating for the sector.
It has also kept its “buy” call for Wilmar with a target price of $6.00.
As at 1.06 pm, Wilmar was flat at $5.04 with 5.5 million shares changed hands.
