20th Nov 2013 09:14
LONDON (Alliance News) - Palm oil producer Anglo-Eastern Plantations PLC Wednesday said it had produced 3% less oil in the first nine-months of the year as its own fruit production fell and it bought less in, but it's hopeful demand and prices will pick up in the near term.
In a trading update, the company said its own production of fresh palm fruit fell 1% to 569,210 tonnes in the nine months to end-September, while it bought in 16% less fresh fruit at 345,000 tonnes. That meant oil production was down 3% to 188,300 tonnes.
It said crude palm oil prices average USD845 a tonne over the nine months, down 20% from USD1,059 a tonne in the third quarter of 2012, but up from USD835 a tonne at the start of this year.
"The Indonesian government recently announced a mandatory blending of biodiesel fuel to at least 10% by January next year which is aimed at helping to reduce the country's current account deficit. The board anticipates that this will lead to increase in demand for crude palm oil and depending on the level of crude palm oil inventory, may help boost the crude palm oil price," the company said in a statement.
Anglo-Eastern said demand for its products remains strong and with prices remaining in a range between USD800 a tonne and USD900 a tonne, it "anticipates that performance for the remainder of 2013 will be satisfactory and in line with management expectations."
The company reiterated that new palm plantings in the first nine months had been behind schedule due to protracted talks over compensating villagers for re-location as well as a delay in issuance of a land release permit and high conservation value permit for its Kalimantan project.
"These negotiations are continuing and the board is confident that these negotiations will be concluded eventually," it said.
Anglo-Eastern shares were down 0.2% at 649 pence Wednesday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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