Malaysia's SD Guthrie sees El Nino impacting 2027-28 palm oil output
Malaysia's SD Guthrie, one of the largest palm oil producers in the world, stated on Tuesday that they expect production to be affected by El Nino, which is expected to bring hotter and drier weather.
El Nino is not expected to affect production in 2026, since its effects do not manifest themselves immediately, but rather after a 12-to-16 month lag. This was stated by Chief Executive Officer Mohd. Haris Mohd. Arshad at a recent press conference.
SD Guthrie reported a net profit of 987 millions ringgit (US$241.3 million) between April and June, nearly double the 505 million ringgit it posted one year ago.
Its revenue dropped to 4,94 billion ringgit from 5,17 billion ringgit.
As of 0645 'GMT, the shares of the company -- based out Kuala Lumpur and with operations in Indonesia Papua New Guinea Solomon Islands -- fell by 0.9% to 6,77 ringgit.
SD Guthrie stated in a press release on its second-quarter results that its performance was bolstered by gains made from its downstream and industrial development segments. This helped offset a decline in its upstream operations, which was partially cushioned due to higher crude palm oil and palm kernel prices.
The company stated that tight global?supplies coupled with resilient demand will keep CPO prices high in the near to medium term.
The report said that "supply-side pressures will likely intensify as El Nino conditions are expected to emerge towards the end the year. Demand, on the other hand, will be bolstered by Indonesia's B50 mandate for biodiesel and the firm crude oil price amid renewed geopolitical tensions."
Malaysia's benchmark CPO price has risen?18% this year to 4,723 Ringgit per metric ton.
Sandeep Bhan said that SD Guthrie’s global trading CEO Sandeep Bhan expected CPO prices to be between?4,600 - 5,000 ringgit for the remainder of the year before rising to?5,200 ringgit by the first quarter next year. ($1 = 4,0910 ringgit). (Reporting and editing by Kevin Buckland; Ashley Tang)
(source: Reuters)
