Malaysia’s SD Guthrie sees El Niño impacting 2027-28 palm oil output
Production for the rest of 2026 is expected to remain largely unaffected
Malaysia's SD Guthrie, a major palm oil producer, anticipates its production will be affected by El Niño in 2027 and 2028. The weather pattern is expected to bring drier and hotter conditions, leading to a lag of 12 to 16 months before its impact on production is felt. CEO Mohd Haris Mohd Arshad disclosed this during a press conference.
Despite this, SD Guthrie reported a net profit of RM987 million for the April-June quarter, double the RM505 million from the previous year. However, its revenue dipped to RM4.94 billion from RM5.17 billion. The company, operating in Indonesia, Papua New Guinea, and Solomon Islands, saw its shares drop by 0.9 per cent to RM6.77.
SD Guthrie's second-quarter results were driven by gains in its industrial development and downstream segments, which offset the decline in its upstream business, partly buoyed by higher crude palm oil (CPO) and palm kernel prices. The company expects global supplies to tighten with El Niño's arrival and demand to be fueled by Indonesia's B50 biodiesel mandate and strong crude oil prices amidst geopolitical tensions.
Currently, Malaysia's CPO prices have risen by 18 per cent to RM4,723 per metric ton and are projected to fluctuate between RM4,600 and RM5,000 for the rest of the year, potentially reaching RM5,200 in the first quarter of next year, according to SD Guthrie's global trading CEO, Sandeep Bhan.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
