Sabah planters see better earnings

KUALA LUMPUR: Plantation companies in Sabah will see better earnings ahead as palm oil price there is set to rise from next month.

"Effective August 1, the Sabah crude palm oil discount from Peninsular Malaysia will narrow from RM100 to RM80 per tonne," a source said.

"This means plantation companies like Hap Seng Plantations Holdings and IJM Plantations, whose earnings are Sabah-centric, should be seeing better earnings from next month," the source told Business Times yesterday. 

When contacted, IJM Plantations Bhd chief executive officer and managing director Joseph Tek Choon Yee said, "Yes, we have already sealed sales contracts with our buying refineries in Sandakan for August 2013 with the revised discount."

"We've been in discussion with the refiners for quite sometime, following the restructuring of the palm oil export duties since January 2013," he said. 

"Although the narrowing of price discount is small, it's a step towards the right direction," he added.

Tek said planters in Sabah laud the narrowing of price discount amid the prevailing low palm oil prices.