Malaysia's Sime Darby Bhd , the world's largest palm oil planter by land size, says the drying effects of El Nino and a prolonged drought could lower its palm oil and fresh fruit bunch production in its current financial year.
Sime Darby Plantation has estimated that the El Nino weather effect and prolonged drought would affect about 6 percent of its palm oil production in Malaysia, and 8-10 percent in Indonesia in the next one to two years, the company told Reuters by email.
"The recent haze would have a similar compounding impact with the prolonged dry period affecting fruits and disrupting oil extraction as well as crop production," said Franki Anthony Dass, managing director of Sime Darby Plantations, the plantation and agri-business arm of Sime Darby Group.
Lower productivity levels in Malaysia, the world's No.2 palm oil producer, could help lift benchmark prices of the vegetable oil. Palm oil's March contract closed 1.2 percent higher on Tuesday evening at 2,411 ringgit ($551.09) per tonne, but down about 3 percent since the start of the year.
The Malaysian plantations-to-motor-conglomerate also expects to see a decline in fresh fruit bunch (FFB) production this year due to the El Nino impact.
Forecasts for its Malaysian FFB output stood at 5.58 million tonnes, down from 5.94 million tonnes the year before, and forecasts for its Indonesian FFB output is seen at 2.75-2.81 million tonnes, down from 3.05 million tonnes a year ago.
However, overall FFB output for the group in the financial year ending June 2016 is seen up at 10.05-10.11 million tonnes from the year before, due to its acquisition of Papua New Guinea-based New Britain Palm Oil. Sime Darby recorded 8.9 million tonnes of FFB output the financial year before.
"New Britain Palm Oil is expected to contribute about 1.72 million tonnes of FFB for financial year 2015/2016," said Dass.
Analysts have forecast declining FFB yields this year in anticipation of a dry El Nino weather impact. Sime Darby's expectation of a 6 percent decline for its Malaysian operations is significant, but not totally unexpected, said Alan Lim, an analyst at MIDF Research in Kuala Lumpur.
"It is not a surprise as the Australia Bureau of Meteorology has formally announced the El Nino since May 2015. Hence, the market had already look ahead into lower FFB production by plantation companies," he said.
"The net impact to earnings is not expected to be huge, as CPO prices usually increase during the period of insufficient supply globally. Historically, the impact of CPO prices to earnings will more than offset the loss in FFB production."
Sime Darby saw falling net profits in its last earnings announcement. Its net profit for first-quarter ended September 2015 fell 34 percent on weaker demand in its consumer business and low commodity prices.
The company had acquired New Britain Palm Oil in March 2015 for $1.7 billion, adding 135,000 hectares of land to Sime Darby's total land bank. ($1 = 4.3750 ringgit)
Reuters
Thu Jan 14 2016
![Sime Darby says dry weather could lower palm oil output Sime Darby says dry weather could lower palm oil output](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/http://img.astroawani.com/2016-01/61452698607_SimeDarby.jpg)
The Malaysian plantations-to-motor-conglomerate also expects to see a decline in fresh fruit bunch (FFB) production this year due to the El Nino impact. - File photo
![Hukuman penjara bapa lakukan serangan seksual ke atas 3 anak perempuan dikurangkan Hukuman penjara bapa lakukan serangan seksual ke atas 3 anak perempuan dikurangkan](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-04/51714453013_courtgavelmahkam.jpg)
Hukuman penjara bapa lakukan serangan seksual ke atas 3 anak perempuan dikurangkan
Dalam penghakimannya, Che Mohd Ruzima berkata perayu gagal membuktikan bahawa Mahkamah Sesyen terkhilaf dalam memutuskan kes itu.
Malaysia-Brunei adakan rundingan mudahkan urusan Imigresen
Malaysia dan Brunei akan mengadakan rundingan bagi memudahkan proses keluar masuk rakyat kedua-dua negara.
![Pan-gon mahu kekal hubungan baik dengan Malaysia Pan-gon mahu kekal hubungan baik dengan Malaysia](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-07/81721124936_KimPanGon.jpg)
Pan-gon mahu kekal hubungan baik dengan Malaysia
Bekas ketua jurulatih Harimau Malaya Kim Pan-gon mahu mengekalkan hubungan baik dengan skuad itu biarpun tidak lagi bersama.
Kos pampasan tanah fasa 1B proses Projek LPB Sabah RM1.2 bilion - Alexander
Anggaran kos pengambilan balik tanah bagi keseluruhan Fasa 1B proses pengambilan tanah dan penilaian pampasan tanah bagi Projek Lebuh Raya Pan Borneo Sabah (LPB Sabah) berjumlah RM1.2 bilion.
Sentiasa berhati-hati, ribut petir diramal berlaku di Sabah
Orang ramai khususnya yang tinggal di kawasan berisiko di Sabah disaran agar bersiap siaga terutama dari segi perubahan cuaca yang tidak menentu yang seterusnya akan mengakibatkan bencana banjir dan pokok tumbang.
Nasib acara sepak takraw wanita diketahui Khamis ini
Nasib acara sepak takraw wanita berpasukan dalam Sukan Malaysia (SUKMA) edisi ke-21 di Sarawak akan ditentukan dalam Mesyuarat Jawatankuasa SUKMA Peringkat Kebangsaan pada Khamis ini.
JPBM Sabah serah jentera khas buat pasukan sukarela
Jabatan Bomba dan Penyelamat Malaysia (JBPM) negeri Sabah sedang dalam perancangan untuk menyerahkan jentera khas, iaitu Volunter Fire Rescue Tender (VFRT) untuk Pasukan Bomba Sukarela (PBS) di Sabah.
Sarawak akan pertahan pingat sukan Muay Thai edisi lalu
Skuad Sarawak akan berusaha mempertahankan masing-masing dua emas, perak dan gangsa dalam kejohanan SUKMA yang dimenangi dalam edisi lalu.
![Usaha pujuk Pan-gon tidak berhasil - Yusoff Mahadi Usaha pujuk Pan-gon tidak berhasil - Yusoff Mahadi](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-07/81721124841_TBFAM.jpg)
Usaha pujuk Pan-gon tidak berhasil - Yusoff Mahadi
FAM pernah berusaha memujuk Kim Pan-gon untuk terus mengemudi skuad Harimau Malaya hingga kontraknya tamat secara rasmi pada akhir tahun depan.
![Kaspersky tinggalkan pasaran AS bermula 20 Julai ini Kaspersky tinggalkan pasaran AS bermula 20 Julai ini](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-02/51708604164_kasperskyancamans.jpg)
Kaspersky tinggalkan pasaran AS bermula 20 Julai ini
Kaspersky mengesahkan kurang 50 pekerja akan terkesan, dan mereka akan diberikan pampasan susulan penutupan syarikat tersebut.
![Dua maut, 4,000 terjejas akibat banjir di Colombia Dua maut, 4,000 terjejas akibat banjir di Colombia](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-06/41717632129_Colombia.jpg)
Dua maut, 4,000 terjejas akibat banjir di Colombia
Hujan lebat membanjiri kawasan savana yang luas di bawah air menyebabkan tanaman dan tanah ladang musnah.
![Perubahan iklim punca tragedi banjir terburuk landa Brazil Perubahan iklim punca tragedi banjir terburuk landa Brazil](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-05/81716783148_tbstreetflooded.jpg)
Perubahan iklim punca tragedi banjir terburuk landa Brazil
Lebih 170 orang terbunuh dan hampir 580,000 kehilangan tempat tinggal selepas ribut dan banjir melanda Rio Grande do Sul bulan lalu.
![El Nino: Pengeluaran durian berkurangan, pekebun jangka harga naik El Nino: Pengeluaran durian berkurangan, pekebun jangka harga naik](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2022-06/41655709984_TBDURIAN.jpg)
El Nino: Pengeluaran durian berkurangan, pekebun jangka harga naik
Cuaca panas dan taburan hujan yang tidak menentu menyebabkan sebahagian besar bunga durian jadi kering dan buah cepat gugur sebelum matang.
![Gelombang haba ragut 61 nyawa setakat ini di Thailand Gelombang haba ragut 61 nyawa setakat ini di Thailand](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-05/81715352900_TBTAHIHOT.jpg)
Gelombang haba ragut 61 nyawa setakat ini di Thailand
Gelombang haba luar biasa dengan suhu yang dirasai melebihi 52 darjah Celsius setakat ini telah meragut 61 nyawa di Thailand.
![Banjir luar biasa landa Afrika Timur Banjir luar biasa landa Afrika Timur](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-05/51714869440_TBfloodwaters.jpg)
Banjir luar biasa landa Afrika Timur
Kawasan di Ethiopia, Kenya dan Tanzania yang biasanya gersang serta dilanda kemarau mengalami taburan hujan luar biasa.
![El Nino: Bekalan lembu, kambing korban mencukupi - Mohamad Sabu El Nino: Bekalan lembu, kambing korban mencukupi - Mohamad Sabu](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2022-03/81648559480_lembu.jpg)
El Nino: Bekalan lembu, kambing korban mencukupi - Mohamad Sabu
Bekalan lembu dan kambing bagi keperluan sambutan Aildiladha adalah mencukupi biarpun negara berhadapan cuaca panas susulan fenomena El Nino.
![Cuaca panas: Felda Tenang, Felda Belara rekod suhu lebih 37 darjah Celsius Cuaca panas: Felda Tenang, Felda Belara rekod suhu lebih 37 darjah Celsius](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-03/71711339862_cuacapanas.jpg)
Cuaca panas: Felda Tenang, Felda Belara rekod suhu lebih 37 darjah Celsius
Dua lokasi tersebut mencatatkan suhu terendah 37.3 darjah Celcius sementara suhu tertinggi 38.3 darjah Celcius.
![Cuaca panas dunia bakal cecah suhu ekstrem Cuaca panas dunia bakal cecah suhu ekstrem](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-03/51711621554_tbmusimkemarau.jpg)
Cuaca panas dunia bakal cecah suhu ekstrem
El Nino akan mendorong kurangnya hujan dan berlakunya episod kemarau yang lebih teruk daripada biasa.
![Kerajaan Persekutuan lulus peruntukan beli pam baharu untuk petani, pesawah di Kelantan Kerajaan Persekutuan lulus peruntukan beli pam baharu untuk petani, pesawah di Kelantan](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-04/81712376828_MohamadSabu.jpg)
Kerajaan Persekutuan lulus peruntukan beli pam baharu untuk petani, pesawah di Kelantan
Kerajaan Persekutuan meluluskan sejumlah peruntukan untuk membeli pam-pam baharu bagi kegunaan para petani dan pesawah di Kelantan.
![Colombia bergelut masalah air, takungan negara kering Colombia bergelut masalah air, takungan negara kering](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-04/71713482025_Colombia.jpg)
Colombia bergelut masalah air, takungan negara kering
Fenomena El Nino melanda di Colombia pada penghujung 2023, menyebabkan suhu tinggi dan kemarau.