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IOI Corporation Bhd has announced expectations for a single-digit increase in palm oil production for the financial year ending June 30, 2027. This projected growth is attributed to an anticipated rise in fresh fruit bunch (FFB) yields alongside enhancements in the group's oil extraction rates.
Datuk Lee Yeow Chor, the Group Managing Director and Chief Executive Officer, noted that the upward trend will be further bolstered by young mature plantations moving into their peak productivity phases.
While the company's Malaysian operations have remained largely insulated from the El Niño phenomenon due to consistent rainfall, its Indonesian assets have faced significant climatic hurdles. Prolonged dry weather and haze in regions like Kalimantan led to a near double-digit percentage decline in Indonesian production last month.
Addressing the long-term nature of climate impacts at a media conference following the company's Annual General Meeting, Lee explained that drought-related production losses typically manifest in cycles—first appearing approximately six months after a dry spell, with potential secondary effects surfacing 15 to 18 months later.
Despite the regional setbacks, the overall impact on the group's total output is expected to be contained, as Indonesian plantations represent approximately 12 percent of IOI Corporation's total cultivated land.
Source: Bernama