Anglo-Eastern reports weaker palm oil production
24/06/2024 (Share Cast) - Palm oil producer Anglo-Eastern Plantations reported a 4% decrease in fresh fruit bunches production in the first five months of the year on Monday, to 403,200 metric tonnes, down from 420,300 tonnes in the same period last year.
The London-listed company, which was holding its annual general meeting, said high rainfall in Kalimantan affected harvesting, though crop production increased by 2% due to peak maturity of trees and a 6% rise in matured areas.#
However, plantations in North Sumatera, Riau, and Bengkulu saw production drops between 2% and 18%, primarily due to replanting activities and excessive rainfall.
Bought-in fresh fruit bunches fell 9% to 367,700 tonnes from 404,000 tonnes, impacted by damaged roads and a major supplier's decision to process its own crop.
As a result, crude palm oil (CPO) production dropped 9% to 154,400 metric tonnes.
The firm said the average CPO ex-Rotterdam price was $1,014 per tonne, slightly up from $1,006 per tonne last year, but the average ex-mill price fell 2% to $750 per tonne.
AEP said it now manages around 90,500 hectares of plantations in Indonesia and Malaysia, with 68,615 hectares planted.
New planting and replanting slowed to 426 hectares due to high rainfall.
The HPP mill, operational since early 2024, was set to start purchasing external crops in the third quarter once its effluent treatment plant is commissioned.
The eighth mill in the KAP estate was pending final environmental approval, with earthworks expected to begin in the third quarter.
Looking ahead, the board noted that the CPO price ex-Rotterdam closed at $1,018 per metric tonne on 5 June, up 9% from the start of the year.
However, demand for CPO was expected to weaken due to increased soybean production in South America and the seasonal peak in CPO harvests in the latter half of the year.
At 1056 BST, shares in Anglo-Eastern Plantations were down 0.3% at 666p.
Reporting by Josh White for Sharecast.com.