FGV expects CPO price to trade at RM3,500 per tonne this year

KUALA LUMPUR, Feb 28  -- FGV Holdings Bhd has projected the price of crude palm oil (CPO) to trade at RM3,500 per tonne throughout this year.

Group chief executive officer Mohd Nazrul Izam Mansor said CPO prices are sustainable given the supply dynamics had normalised.

“We feel that once the supply dynamics had normalised, which include free-flow entry of labour and then with the global pandemic easing, I think we should be able to see a decrease in prices but of course right now with the Ukraine-Russia war -- this has significantly affected the price level,” he told a virtual media briefing after announcing FGV’s fourth quarter (Q4) financial performance on Monday.

Explaining further, he said CPO prices almost touched RM6,500 per tonne sometime last week.

“So this is a typical reaction from market demand and supply perspective and of course on a range of palm oil prices, we expect the prices to trade at the RM3,000 per tonne to RM5,000 per tonne,” he said.

Furthermore, Mohd Nazrul said while uncertainties surrounding labour supply continue to persist, the group expects the situation to recover in the third quarter this year.

He said the plantation sector will keep focusing on harvesting, crop recovery and replanting efforts to ensure the profitability of the group in the long run.

“Along with this, our sugar sector will optimise its local presence through an aggressive sales strategy, regional export penetration and value-added business activities to improve sales volume.

“Similarly, our logistics sector will also continue to explore opportunities for market expansion and diversification while heightening its operational effectiveness,” he said.

To date, FGV has a total of 30 Roundtable Sustainable Palm Oil (RSPO) certified mills and 67 Malaysian Sustainable Palm Oil (MSPO) certified mills. FGV is committed to the lifting of RSPO suspension and achieving full RSPO-certified status.

Moving forward, Mohd Nazrul said FGV remains steadfast to prepare for full adoption of a holistic sustainability approach that will drive FGV to rethink, repurpose and redesign its business strategy in becoming sustainability-based commerce.

He said the adoption of a holistic sustainability approach covers all sustainability programmes to enable FGV to become a zero-impact business operation.

-- BERNAMA