We remain negative on CPO prices in the medium term as biodiesel demand is unlikely to pick up significantly in the near term. We understand the timeline for the implementation of B10 in Malaysia is uncertain as it is highly dependent on the price gap between CPO and gasoil prices. For Indonesia, biodiesel demand is mainly driven by the PSO segment while the take-up rate in non-PSO is expected to stay low. Thailand is targeting to launch B7 programme in 2018. Maintain UNDERWEIGHT.

Source: UOB Kay Hian Research - 10 Aug 2017