FGV expects CPO prices to range RM2,500-RM2,600 per tonne in H1 2021

File picker shows workers loading palm fruits onto a lorry at a plantation in Sepang October 30, 2019. — Picture by Shafwan Zaidon
File picker shows workers loading palm fruits onto a lorry at a plantation in Sepang October 30, 2019. — Picture by Shafwan Zaidon

KUALA LUMPUR, Nov 17 — FGV Holdings Bhd expects crude palm oil (CPO) to trade in the range of RM2,500 to RM2,600 per tonne for the first half (H1) of its financial year ending Dec 31, 2021 (FY21).

Group chief executive officer Datuk Haris Fadzilah Hassan said given that the CPO price was currently quite strong at above RM3,000 per tonne, the forecast had taken into consideration the supply, demand as well weather conditions that could affect production.

“Even though it looks good for the next six months, we are conservative in our view on how prices will develop in the full-year period of 2021,” he said during the group’s online media briefing on its third quarter (Q3) FY20 financial results today.

For Q4 FY20, he said FGV was expecting both fresh fruit bunches and CPO to be impacted by weather uncertainties and partial lockdown in Sabah, with the CPO price remaining strong until the end of the year.

On the issue of foreign labour shortage, he said the group was expecting to have 90 per cent of its total foreign labour requirement met in the current quarter, a reduction of four per cent from Q3 FY20.

For 2021, he said FGV would be guided by government’s policy on foreign labour intake to address the shortage of labour, which would be among the key factors impacting crop recovery on the field.

“As for the sugar business, MSM Malaysia Holdings Bhd’s capacity upgrade for value-added products on liquid sugar and fine syrup at MSM Johor is set for completion in Q4 FY20.

“They will also be continuing the just-in-time raw sugar procurement method for 2021, similar to what they have been employing this year,” he said.

In terms of logistics business, he noted that the group had secured a new three-year external contract to transport 165,000 tonnes of CPO per annum from a customer.

It would also have a completion of an additional 15,600-tonne storage capacity in Pasir Gudang, Johor and Port Klang, Selangor.

Meanwhile, on its new food business, in particular the integrated farming and consumer products, he said to-date FGV had launched three essential food items under the flagship brand of SAJI Rice, SAJI Coarse Sugar and SAJI Coconut Milik.

He said FGV had also been given a rice wholesale licence by the Agriculture and Food Industry Ministry in June 2020, which would open new avenues in its rice business.

It has started the planting of 28 hectares of MRQ76 fragrant rice seeds gardens in Sungai Leman, Selangor, and Seberang Perak, Perak. The planted MRQ76 seeds, which are scheduled to be harvested by January 2021, will be used to commence 500 hectares of FGV’s contract farming scheme.

“There is also a new fresh milk factory through our farm in Linggi, with a capacity of 30,000 litres per day, which has been constructed and scheduled for completion in H1 2021,” said Haris Fadzilah.

The farm, he said, was currently undergoing upgrading works and it would be finalised by mid-December 2020, prior to the delivery of a new batch of 132 heifers from Australia.

Meantime, on the matter of addressing the United States (US) Customs and Border Protection withhold release order on FGV’s palm oil and palm oil products in the US, he said FGV was committed to taking all necessary measures towards the revocation of the order. — Bernama

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