Wilmar's share price slumps amidst China bird flu scare

It already dropped 14%.

According to Phillip Securities, Wilmar shares are down 14% since late January. "We believe Wilmar’s recent weak share price performance was driven mainly by concerns on the impact of China’s bird flu as well as low CPO prices," it said in a report.

According to Bloomberg’s recent article, Wilmar sees China importing fewer soybeans this year as an outbreak of bird flu curbs demand for poultry.

Here's more from Phillip Securities:

This will have an impact on demand and prices of soybean meal used for livestock feed, thus exerting downward pressure on soybean crush margins.

Nonetheless, on the supportive side for Chinese demand, China’s National Bureau of Statistics recently forecast China’s soybean plantings will fall by another 8.5% this year as land continues to be shifted to grain production.

Albeit we think the impact of China’s bird flu may be less than initially feared, we are conservatively lowering its Oilseeds & grains margins to US$8/MT from US$12/MT.

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