25/07/2011 (The Star) - Sime Darby Plantation Bhd expects its crop production to increase by 6% in the financial year ended June 30, 2011 as compared to the previous financial year as the cyclical down trend of the oil palm has ended.

Sime Darby Plantation, the plantation arm of the listed Sime Darby Bhd, recorded fresh fruit bunches at 9.8 million tonnes last financial year.

Sime Darby is expected to release its fourth quarter financial results next month.

In financial year 2010, the plantation segment was the highest revenue contributor to the Sime Darby group at 33%.

Sime Darby Plantation managing director Franki Anthony Dass said the oil palm was showing its cyclical improvement now after two years of cyclical downtrend that was further hampered by bad weather.

“So far this year, the weather has been excellent with good rainfall. With the support of our agro-management practices we expect the production to be up,” he told reporters after a briefing that marked the company's production of one million tonnes of certified sustainable palm oil (CSPO) as of July.

“We want the production to be up as the crude palm oil (CPO) price is good and we want to capitalise on that,” he said.

Dass expected the CPO prices would still hover around RM3,000 per tonne until early next year.

“The CPO price is expected to maintain at that level due to sustainable demand. More manufacturers are now using CPO in their production as well,” he said.

On CSPO, Sime Darby Plantation achievement was supported by its effort to certify its strategic operating unit (SOU) by the Roundtable of Sustainable Palm Oil (RSPO).

The company now has 36 out of 63 SOUs certified by RSPO, capable of producing more than 1.5 million tonnes of CSPO and certified sustainable palm kernel oil annually.