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C
ommodity markets were
plagued by challenging
conditions in the year under
review. In 2018, the prices of oil
palm products were traded lower
globally. CPO price was lower by
19.9%, averaging RM2,239 per
metric tonne (“MT”) compared
to RM2,795 per MT in 2017.
Depreciating currencies of key
importing countries such as India
and China further limited their
purchasing power on palm oil. As
a result of the weaker demand
and stronger CPO production in
Indonesia, the Malaysian palm oil
stocks hit a record high by the
end of 2018 thereby adversely
impacting prices.
The trade dispute between China
and the US, which intensified in
July 2018 with China imposing
a tax on US exports including
soybeans also contributed to the
volatility of commodity prices and
heavily influenced the direction of
CPO prices during the year.
Amid a bearish market, the division
recorded revenue of RM102.84
million in FYE2019, 25.5% lower
than last year’s RM138.10 million
largely due to the sharp decline in
palm product prices. The average
price realized for CPO (net of
duty) registered during the year
was RM1,921 per MT compared
to RM2,342 per MT last year.
FFB production also reduced to
166,080 MT compared to 175,774
MT harvested last year with lower
yield of 24.19 MT per mature
hectare (FYE2018: 25.15 MT).
FFB are
transported to the
mill within 24 hours
At the mill, FFB are sterilized
and pressed to extract oil
Note: The diagram above is refer to our Plantation Business in Kalimantan
Crude oil is then
shipped to the
refineries
Organic Fertiliser
Compost
FFB are
harvested
Plantation Division Business Model
performance
review
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