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KUALA LUMPUR – SD Guthrie, one of the world's largest palm oil producers, announced on Tuesday (August 11) that it anticipates its palm oil production to be impacted in 2027 and 2028 as the El Niño weather phenomenon is set to bring drier and hotter conditions. According to CEO Mohd Haris Mohd Arshad, speaking at a press conference, production for the remainder of 2026 is expected to remain largely unaffected by El Niño, as its effects are typically felt after a 12-to-16-month lag.
Financially, SD Guthrie reported a net profit of RM987 million (US$241.3 million) for the April-June period, nearly doubling the RM505 million recorded in the same period a year earlier. However, the company's revenue saw a decline, dropping to RM4.94 billion from RM5.17 billion.
Based in Kuala Lumpur with extensive operations in Indonesia, Papua New Guinea, and the Solomon Islands, the company stated in its second-quarter results that its performance was underpinned by strong gains from its industrial development and downstream segments. These gains helped to offset a decline in its upstream business, which was partially cushioned by higher average crude palm oil (CPO) and palm kernel prices.
Looking ahead, SD Guthrie expects tightening global supplies and resilient demand to keep CPO prices elevated in the near-to-medium term. The company noted that 'supply-side pressures are likely to intensify with the anticipated emergence of El Niño conditions towards the end of the year, while demand will be underpinned by the implementation of Indonesia’s B50 biodiesel mandate and firm crude oil prices amid renewed geopolitical tensions.'
Malaysia's benchmark CPO prices have climbed by 18 per cent to RM4,723 a metric ton so far this year. Sandeep Bhan, SD Guthrie’s global trading CEO, projected at the press briefing that CPO prices are expected to range between RM4,600 and RM5,000 for the rest of this year, potentially rising to RM5,200 in the first quarter of next year. Meanwhile, the company's shares fell 0.9 per cent to RM6.77 as of 0645 GMT.
Source: The Business Times