KUALA LUMPUR, Feb 8 (Bernama) -- Boustead REIT Managers Sdn Bhd, the first Islamic oil palm plantation real estate investment trust (REIT), expects better earnings this year due to increasing demand and higher crude palm oil (CPO) prices.

The company, a subsidiary of Lembaga Tabung Angkatan Tentera, manages the Al-Hadharah Boustead REIT.

Its chairman Tan Sri Lodin Wok Kamaruddin said demand was increasing from the markets in the United States, India and China.

He said the purchasing pattern of the US market for CPO showed an increase of 13.5 per cent last year.

Asked about the CPO outlook, Lodin said: "We believe that price of CPO will continue to remain bullish for quite a while."

He said the demand for biodiesel also has an impact on the palm oil prices.

Another factor, he added, was that the worldwide production of palm oil is expected to be affected by the El-Nino storm.

According to Lodin, these factors will continue to keep the CPO prices at a high level of between RM1,800 to RM2,000 per tonne for at least a few years.

He was speaking at a press conference after the listing of the Al-Hadharah Bousted REIT here today.

The Al-Hadharah Boustead REIT is involved in eight oil palm estates and two palm oil mills, all located in Peninsular Malaysia, covering 12,680 hectares.

On programmes for improvement, Lodin said the company would continue to utilise those areas which have been undeveloped in the past.

He also said that its planting techniques through tissue culture materials have increased by 85 per cent the oil yield compared to the normal planting method.

Lodin said the company would emphasise on precision agriculture, looking at efficiency, effectiveness and the cost of input.

"Last year, our yield was 25 tonnes per hectare but with gradual improvement the company aims to achieve a 28 percent increase," he said.

On the company's listing, Lodin said it had done everything possible to make sure that Islamic REIT using plantations as assets would be well received by the market.

"We are confident that it will be successful," he said.

The stock opened this morning RM1.10 against the initial public offering of 99 sen, showing a premium of 11 sen with 11,760 lots changing hands.

-- BERNAMA