El Nino Reality Check Hits Plantation Stocks

Plantation stocks are facing a reality check as investors test their expectations of higher crude palm oil prices against actual fresh fruit bunch production.

The market's anticipation of tighter supply and stronger earnings due to El Nino may not materialize, according to Tradeview Capital Sdn Bhd chief investment officer Nixon Wong.

CPO appears to be entering a structurally tighter period, which could benefit pure upstream planters with high operating leverage to palm oil prices.