2nd Nov 2022 11:26
(Alliance News) - Anglo-Eastern Plantations PLC on Wednesday reported a small decrease in crude palm oil production and said it anticipates a fall in prices, despite the high prices seen in the year to date.
For the first nine months ended September 30, production of fresh fruit bunches from continuing operations was 859,900 metric tonnes, a decrease of 3% compared to the 886,980mt in the same period last year.
Fresh fruit bunches are the main raw material for producing palm oils. Anglo-Eastern is a producer of palm oil and rubber across Indonesia and Malaysia.
Anglo-Eastern said replanting in Bengkulu, in Indonesia, reduced the matured area by almost 1,800 hectares over the last two years, which explained the decline of 11% in production in this region. Production in Kalimantan region, in the Indonesian section of the island of Borneo, also experienced a drop of 8% due mainly to seasonal variation.
Bought-in fresh fruit bunches - bunches bought from outside the company's estates - also decreased 4% to 845,850mt from 878,590mt.
Reflecting the decrease in fresh fruit bunch production, crude palm oil produced was 351,460mt, a decrease of 3% compared to 364,040mt last year.
However, the price of crude palm oil averaged USD1,471 per metric tonne for the first nine months of 2022, 27% higher than the USD1,156 per recorded in the corresponding period in 2021. The company noted that "prices remain volatile".
Shares in Anglo-Eastern Plantations were trading 4.4% higher at 814.00 pence each in London on Wednesday morning.
Anglo-Eastern's total landholding from its continuing operations comprises 90,690 hectares. The planted area stands at around 68,000 hectares.
New planting and replanting for the nine months ended September 30 totalled 1,367 hectares against 2,129 hectares for the corresponding period last year.
Anglo-Eastern said the construction work of the seventh mill in North Sumatera is approaching the final stage of completion. The mill is likely to be completed by the end of 2022 and to be commissioned in the first quarter of 2023.
Looking forward, the company said crude palm oil prices are expected to be weak for the remaining part of the year as the industry enters into the high production season. In addition, the Indonesian government's decision to waive the export levy until the end of October 2022, in its effort to flush out and reduce its stockpile of palm oil, could push prices even lower.
By Chris Dorrell; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.