Takeaways

• Rising palm oil prices and easing ESG concerns could revive investor interest in Singapore-listed plantation stocks.
• Analysts forecast CPO prices to grow 10% annually, with tighter supply and stronger Asian demand driving gains.
• Local plantation counters like First Resources and Bumitama Agri could benefit from new capital inflows under Singapore’s market-boosting initiatives.

Singapore-listed palm oil stocks may finally be poised for a comeback, as rising crude palm oil (CPO) prices and easing environmental, social, and governance (ESG) concerns draw investors back to a sector long overshadowed by sustainability risks.

According to an Oct 2 report by Aletheia Capital, tighter global CPO supplies and stronger demand from key Asian buyers such as India and China could drive prices significantly higher in the coming years. Analyst Nirgunan Tiruchelvam expects CPO prices to rise around 10% annually, averaging US$1,060 per tonne in 2025, US$1,166 in 2026, and US$1,282 in 2027, up from the current spot price of US$962.

He attributes the upward momentum to volatile weather patterns like El Niño and sustained import demand, noting that global palm oil supplies could fall to multi-year lows by 2027.

Read More: MPOC Says More Sustainable Challenges Await Palm Oil Industry

Over the past decade, despite palm oil prices doubling, plantation stocks in Singapore, Malaysia, and Indonesia have lagged behind due to ESG-related investor caution over deforestation and biodiversity loss. The correlation between plantation valuations and palm oil prices dropped to 42% since 2015, down from 83% between 1995 and 2015, reflecting weaker investor confidence.

However, that trend may be reversing. Analysts believe that recent rollbacks of ESG-related disclosure and anti-greenwashing requirements in the US could ease global pressure on the industry. Shares of Singapore-listed plantation firms, such as First Resources, Bumitama Agri, Kencana Agri, Indofood Agri Resources, and Golden Agri-Resources, have already climbed between 15% and 260% since the start of 2025.

Aletheia Capital recently initiated “buy” ratings on four of these counters, citing strong fundamentals such as young plantation estates, efficient oil extraction rates, and vertically integrated operations that help protect margins.

Meanwhile, Singapore’s broader market is also set to benefit from the Monetary Authority of Singapore (MAS) initiative to channel S$5 billion into promising mid-cap local companies through selected fund managers. Fullerton Fund Management launched the first retail fund under this programme, Fullerton Singapore Value-Up, which will focus exclusively on Singapore-listed securities. Analysts from UOB Kay Hian and Maybank Research expect First Resources and Golden Agri-Resources to be among the potential beneficiaries.

Also Read: Cargill Offers RSPO Palm Oil to All US Customers

Investors can also gain exposure to palm oil through Wilmar International, an agri-business giant involved in palm oil cultivation and processing. However, Wilmar’s shares have fallen sharply this year following a corruption ruling by Indonesia’s Supreme Court over a past cooking oil export permit scandal.

Still, industry watchers believe that strong dividends, healthy balance sheets, and easing ESG headwinds could sustain investor appetite for Singapore’s plantation sector in the months ahead.

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Source: THE STRAITS TIMES