01/05/2009 (SHARECAST), London - Palm oil producer R.E.A. Holdings said the crop of oil palm fresh fruit bunches harvested to the end of April was marginally below the budgeted level but ahead of the previous year’s level.

The crop amounted to 156,637 tonnes, versus the budgeted expectation of 158,429 tonnes and last year’s level of 150,819 tonnes.

The crude palm oil (CPO) extraction rate for the period was 23.2% against a budget of 23.6% and last year’s rate of 23.09%.

The company has implemented some measures to improve harvesting standards and hopes these will lead to an improvement in the CPO extraction rate next year.

The price of CPO has started to recover after hitting low points in the first two months of the year and currently stands at $770 per tonne. The average price for the first four months of 2009 was $603, compared to an average price for the whole of 2008 of $939.

‘Less readily available credit and reduced revenues are likely to lead to some slowdown in extension planting and, particularly as respects less efficient growers, reduction in fertiliser applications. This should result in some scaling back in the rate of future growth in CPO supply,’ the company said.

The group has renegotiated its banking facilities and extended these to cover a five-year period.