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Felda Holdings, one of the world's largest palm oil producers, expects its output to rise between 1% and 3% in 2025, driven by improved yields and higher oil extraction rates, chief executive Fakhrul Nizam Othman told Reuters on Wednesday.
Othman said the company's efforts to replant ageing estates had helped boost fresh fruit bunch production, while oil extraction rates had also improved, pointing to higher crude palm oil output in 2025.
"Our oil extraction rate is also improving, and we are targeting between 20.8% and 21%, compared with 20.61% last year," Othman said in an interview, referring to the proportion of oil extracted from fresh fruit bunches.
Felda Holdings owns oil palm plantations in both Malaysia and Indonesia, with a total planted area of 333,765 hectares (824,750 acres).
Othman noted that the company's replanting rate had reached about 5% in recent years, exceeding the national target of 4%, as the firm aims to have 80% of its trees at peak production.
He added that the company plans to replant 14,000 hectares this year, slightly below the 18,000 hectares achieved last year. He explained that the company is using new planting materials during replanting, which deliver better results than older varieties.
Price and Global Production Outlook
Othman said the current price gap between palm oil and soybean oil had dampened demand from countries such as India and China, which could weigh on prices later in the year.
Crude palm oil prices are expected to average between 3,900 and 4,200 ringgit per tonne in 2025, below the current price of around 4,600 ringgit.
On global output, production in Indonesia, the world's largest palm oil producer, is expected to rise to 50 million tonnes in 2025, up from 49 million tonnes last year. Malaysia's output is also expected to edge up slightly to 19.6 million tonnes.
"I think both countries will see a modest improvement compared with last year," Othman added.
Demand for Sustainable Palm Oil
Othman noted that rising demand for sustainable palm oil is prompting Felda Holdings to increase production in line with the EU Deforestation Regulation standards, which command premium prices. He confirmed that the company's first shipment exported under these standards had already secured a price premium.
Source: Reuters