KUCHING: Sarawak Plantation Bhd marginally increased the production of fresh fruit bunches (FFBs), crude palm oil (CPO) and palm kernel last year.
The group, which owns 16 oil palm estates in northern and central Sarawak, harvested nearly 308,870 tonnes of FFBs last year, an increase of 4,750 tonnes or more than 1.5% from 304,120 tonnes in 2012.
CPO production volume rose by some 2,900 tonnes to 136,810 tonnes from 133,900 tonnes in 2012. Palm kernel production volume climbed by 420 tonnes to 29,385 tonnes from 28,965 tonnes during the review period, according to Sarawak Plantation’s filings with Bursa Malaysia.
Last month, the group produced 29,931 tonnes of FFBs which was lower than 31,760 tonnes in December-2012. Moreover, CPO output rose by more than 20% to 12,867 tonnes from 10,522 tonnes while palm kernel production was raised to 2,882 tonnes from 2,350 tonnes.
Besides processing FBBs from its own estates, Sarawak Plantation purchased FFBs from nearby plantations and smallholders. In 2012, the group bought some 353,000 tonnes but last year’s figures were not available.
The group owns two palm oil mills — in Niah,Miri and Mukah — which have combined installed capacity of 180 tonnes per hour. Its 16 oil palm estates had total planted area of 28,243ha as of Dec 31-2012. Through subsidiary SPB Pelita Suai Sdn Bhd, the company had developed 1,855ha of NCR land with oil palm.
The group is also into production of palm oil seeds, around two million in 2012.
Like most other plantation companies whose earnings have been hit by the depressed CPO prices, Sarawak Plantation group’s net profit fell by 28.7mil or 55% to RM23.7mil in the first nine months to Sept 30,2013 from RM52.4mil in the corresponding period in 2012.
Group revenue shrank to RM249mil from RM339.5mil or down by a hefty RM90.5mil. The company had attributed the weak earnings mainly to lower realised average selling prices of CPO and palm kernel, and declined sales volume of CPO.
Meanwhile, HLIB Research has upgraded the plantation sector from “Underweight” to “Neutral” due to a better outlook.
“We are turning slightly more positive on the sector’s demand and price outlook, underpinned by more synchronized global economic growth, led by the world’s major economies, including the US and Eurozone, and higher biodiesel mandate from Malaysia and Indonesia,” the research house said in a report.
Indonesia and Malaysia are the world’s top palm oil producers.
However, HLIB said despite its more bullish view on palm oil demand, it believed that it was unlikely for palm oil prices to go up significantly higher from the current level.
This, it reasoned, was because biodiesel policy alone is insufficient to boost CPO price higher, and that at current level, the attractiveness of palm oil over other oil seeds had diminished.
It said concerns on palm oil output shortfall could be just temporary as growth might resume once weather uncertainties were over.
The Malaysian Pam Oil Board is due to release the country’s December palm oil inventories today.
A Bloomberg survey has indicated that Malaysia’s last month palm oil stockpiles probably declined for the first time in four months.