27th Jun 2016 11:22
LONDON (Alliance News) - Anglo-Eastern Plantations PLC on Monday reported lower production of crude palm oil year-on-year in the first five months of 2016.
Anglo-Eastern operates its own plantations in Indonesia and Malaysia where it grows the fresh fruit bunches required to produce crude palm oil, but like others in the industry also purchases additional fresh fruit bunches from third parties.
In the first five months of 2016, production of Anglo-Eastern's own fresh fruit bunches increased by 1% on the same period in 2015 to 314,260 metric tonnes. Fresh fruit bunches that were bought in, however, dropped by 24% to 201,160 metric tonnes which Anglo-Eastern said was a result of intense competition from new mills, while lower crop production among smallholders due to the "lingering effects" of El Nino also contributed to the lower purchase of external crop.
As a result, total crude palm oil produced was 108,510 metric tonnes, which is 3% lower than the corresponding period the year before.
Anglo-Eastern reiterated that new plantings remain behind schedule due to delays in finalising settlement of land compensation with villagers in Bengkulu, Bangka and Kalimantan. In the five months new planting was 427 hectares, down from 760 hectares the year before.
Meanwhile, the mechanical works at the biogas plant in Kalimantan mill are now complete, but progress of the civil works for the anaerobic lagoon is severely affected by heavy rain, Anglo-Eastern said. The company expects to fill the lagoon with effluents before the end of June and top it with membrane to trap the methane gas by the third quarter of 2016.
Civil works on another biogas plant in Bengkulu are 80% complete and plant equipment has been delivered to site.
Anglo-Eastern added that it expects the crude palm oil price to moderate as production picks up in the third quarter of 2016. The crude palm oil price averaged USD664 per metric tonne in the first five months of the year, up marginally on the USD662 per metric tonne recorded the year before.
"We anticipate the CPO price will remain generally stable and the board cautiously expects cash flow to improve," Anglo-Eastern said in a statement ahead of its annual general meeting on Monday.
Shares in Anglo-Eastern were trading down 3.4% at 396.25 pence on Monday afternoon.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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