Two months of strong export growth cut palm oil inventory in August to 1.46m MT, the lowest level since Feb 2011. This is a positive development if strong demand is sustained.

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Sector Update � Plantation (NEUTRAL, maintain) - Inventory fell to the lowest level in 67 months Two months of strong export growth cut palm oil inventory in August to 1.46m MT, the lowest level since Feb 2011. This is a positive development if strong demand is sustained. Weather has returned to normal and production is expected to improve further. Soybean oil premium has narrowed while the price of CPO is now more than doubled that of Brent crude. We maintain our CPO ASP assumption, sector NEUTRAL rating and SELL on FGV, GENP and SIME on valuation grounds.

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