MARKET DEVELOPMENT
CPO Price Could Fetch RM2,700 Per Tonne By End Of March, Says Sime Darby CEO
CPO Price Could Fetch RM2,700 Per Tonne By End Of March, Says Sime Darby CEO
25/02/2016 (Bernama) - Crude palm oil price could touch RM2,700 per tonne by the end of March amid lower yield due to El-Nino, Sime Darby Bhd President and Group Chief Executive Tan Sri Mohd Bakke Salleh said.
"I am looking at RM2,500 and RM2,700. This is based on El-Nino weather, which led to lower fresh fruit bunches (FFB)," he said.
The CPO future contracts ended lower today with March 2016 declining RM22 to RM2,461 tonne, April 2016 down RM28 to RM2,503 a tonne, May 2016 RM31 lower at RM2,520 a tonne, while June 2016 slipped by RM30 to RM2,517 a tonne.
The El Nino effect on FFB is also experienced by plantations in Indonesia, Thailand, the Philippines and Papua New Guinea, Mohd Bakke said after announcing the group's financial results here today.
Other factors affecting the prices were the floundering crude oil prices, hovering between US$30 and US$35 per barrel.
The tropical oil is used for blending into fuel for the production of biodiesel, a substitute for crude oil.
On related development, he said Sime Darby is set to aggressively replant between five and six per cent of its total oil palm cultivation area.
Areas, which are not giving good FFB production, will be replanted with better-yielding oil palm seedlings, he added.
Sime Darby's Plantation Division posted a lower pre-tax profit of RM148.4 million for the second quarter ended Dec 31, 2015 from RM269.8 million in the corresponding quarter a year earlier.
"I am looking at RM2,500 and RM2,700. This is based on El-Nino weather, which led to lower fresh fruit bunches (FFB)," he said.
The CPO future contracts ended lower today with March 2016 declining RM22 to RM2,461 tonne, April 2016 down RM28 to RM2,503 a tonne, May 2016 RM31 lower at RM2,520 a tonne, while June 2016 slipped by RM30 to RM2,517 a tonne.
The El Nino effect on FFB is also experienced by plantations in Indonesia, Thailand, the Philippines and Papua New Guinea, Mohd Bakke said after announcing the group's financial results here today.
Other factors affecting the prices were the floundering crude oil prices, hovering between US$30 and US$35 per barrel.
The tropical oil is used for blending into fuel for the production of biodiesel, a substitute for crude oil.
On related development, he said Sime Darby is set to aggressively replant between five and six per cent of its total oil palm cultivation area.
Areas, which are not giving good FFB production, will be replanted with better-yielding oil palm seedlings, he added.
Sime Darby's Plantation Division posted a lower pre-tax profit of RM148.4 million for the second quarter ended Dec 31, 2015 from RM269.8 million in the corresponding quarter a year earlier.