Palm oil producers see red despite record output in Malaysia

Published Jun 27, 2023

Tridge summary

Crude palm oil (CPO) output in Malaysia reached a four-year high in the first quarter of 2023, but the sharp drop in CPO prices has resulted in record-low net profits for big producers. Comparing the first quarter of 2023 to the same period in 2022, net profits for the major producers dropped by 78.9%. The decline in profits is primarily attributed to the significant drop in the price of CPO, which was exacerbated by an export ban in Indonesia and disruptions in the export of sunflower oil from the Black Sea.

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Original content

Crude palm oil (CPO) output in Malaysia in the first quarter of this year was at a four-year high, but a sharp drop in price has left net profits for the big producers at record lows. Malaysia produced 3.9 million metric tonnes of CPO in the first quarter of this year (Q1 2023), the highest for a first quarter output since 2019 when it recorded a production of 4.95 million metric tonnes. Yet, net profits for the big producers were down 78.9% across the board compared with Q1 2022 when production was just a breath lower at 3.8 million tonnes. Oil palm is a seasonal crop and production usually peaks in the third quarter of the year and bottoms out in the first quarter. Hence comparisons are made quarter-on-quarter (q-o-q). The big losers were Boustead Plantations Bhd, FGV Holdings Bhd and Sime Darby Plantation Bhd. Boustead saw its net profit dive 98.8% q-o-q, from RM435.16 million in Q1 2022 to RM5.22 million in Q1 2023. In the same period, FGV saw its profit drop 96.7% from ...

Source: UkrAgroConsult