Boustead Plantations: CPO price may rise

PETALING JAYA: Boustead Plantations Bhd expects crude palm oil (CPO) prices to average RM2,300 to RM2,600 per tonne this year as buyers from China and India starts to replenish their vegetable oil stocks.


"Currently, CPO pricing is hovering around RM2,200 per tonne. It is facing some challenges as there is abundant supply of soybean, its biggest competitor," said Boustead vice chairman Tan Sri Lodin Wok Kamaruddin.

“Moving forward, we can expect CPO prices to trade higher as demand start to pick up. China and India, the world's most populous nations are likely to start buying more to replenish their stocks. 

"Perhaps then we could see prices climb to between RM2,300 and RM2,600 per tonne,” Lodin said.

He expressed hope of better harvest for the year as more oil palm trees mature and bear more fruits. 

The ongoing replanting programme to replace aging trees with high-yielding hybrids and clones supplied by its associate, Applied Agricultural Resources Sdn Bhd (AAR) will help raise yield at its estates.

AAR, an equal joint venture between Boustead Plantations Bhd and Kuala Lumpur Kepong Bhd (KLK), had been breeding hybrids for more than 25 years.

"Our high-yielding hybrid seeds are meticulously bred and cloned by AAR scientists," Lodin said, adding the hybrids have proven track records of producing more than 30 tonnes of fresh fruit bunches with 23 per cent oil extraction rate. 

That works out to be about seven tonnes of oil per hectare in a year, almost two times higher than the country's average yield. Among the group's high yielding areas are its Sg Jernih and Segaria Estates.

Lodin noted AAR's palm breeding plan is to produce elite planting materials using marker assisted genome-wide selected palms. This, he said, will lead to a speedier and more precise prediction of superior parents for seed production.

AAR's designer seedlings and clonal materials are helping Boustead raise output and oil yield across its oil palm planted area of some 70,000 hectares.


Last month, Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas announced that the Malaysian Palm Oil Board (MPOB) will collaborate more closely with the police in enforcing against oil palm fruit theft. 

For many years, disputes of ownership in Sarawak's native customary rights land has somewhat fueled unintended thefts of oil palm fruits. 

Since such court cases are often entangled in political undercurrents, the palm oil industry suffered loss to pilferage amounting to tens of millions ringgit.

Last year, the minister said MPOB had issued 278 compounds, terminated three business licenses while imposing eight compounds on those found abetting pilferage of oil palm fruits.

Following the regulators commitment to step up enforcement, Boustead Plantations which have suffered from oil palm fruit thefts, may see more justified earnings from these disputed areas.

Lodin highlighted the courts have recently ruled in favour of Boustead Plantations at its disputed estates in Sarawak. Going forward, in all fairness, with better enforcement of the law by MPOB and the police, the group should be able to harvest all the oil palm fruits it is legally entitled to and therefore, post better earnings.