, Singapore

Here's the impact of US debt woes on Golden Agri's growth outlook

CPO prices feared to decrease further.

According to OCBC Investment Research, geo-political events are also weighing on Golden Agri sentiment. Key among which is the impasse over the raising of US’ debt ceiling. 

Here's more:

Some experts warn of world-wide implication should the US government run out of money to pay its bills, as this could severely hurt the world’s largest economy and even send it back into recession.

They also expect it to weight on the USD and raise interest rates across the board.

Also expected to be affected is the demand for crude oil, and should crude prices fall below US$100/barrel, it would curtail the bio-diesel demand for CPO (even though both Malaysia and Indonesia have started new initiatives to increase the domestic mandate of bio-diesel).

Against this bearish background, Golden Agri-Resources (GAR), being one of the largest oil palm plantation owners in the world, could continue to underperform (CPO prices on average down 22% YoY and 2% QoQ in 3Q13).

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