June stockpile merely inched
higher MoM

Stockpile still supportive of CPO price
MPOB’s June 2021 stockpile of 1.61mt remained tight, and came in below Bloomberg’s survey estimates of 1.65mt. As we enter into seasonally high output months in 2H21, the CPO price risk remains on the downside although it could be buffered by a shortfall in output, which, in part, could be due to shortage of workers in MY. At the same time, CPO price will continue to be supported by its huge discount to other competing oils which are also in tight supplies. We maintain our POSITIVE sector view. Preferred BUYs are KLK, SOP and BPLANT.