KUALA LUMPUR, Nov 28 (Reuters) - Malaysia’s FGV Holdings Bhd , the world’s largest palm oil producer, on Thursday forecast crude palm oil (CPO) prices in the range of 2,200 to 2,400 ringgit in the fourth quarter due to sustained demand in key markets.
FGV’s forecast for the October-December period is higher than its estimated average price of 1,983 ringgit ($475.54) per tonne for the previous three months, but below current prices, which hit 2,726 ringgit at the market close.
The company’s exports will continue to be supported by firm demand from its three biggest markets of India, Pakistan and China, which have been “scrambling” to purchase cheap palm oil, FGV Group CEO Haris Fadzilah Hassan said.
Haris said they faced no disruption to exports to India despite an earlier call by the Solvent Extractors’ Association of India to boycott Malaysian palm oil over Malaysian Prime Minister Mahathir Mohamad’s criticism of India’s policy towards Kashmir.
“Overall the outlook is very positive,” Haris told a news conference to announce FGV’s third quarter results.
FGV posted a net loss of 262.4 million ringgit over the July-September period, its sixth straight quarterly loss, versus a loss of 849.5 million ringgit a year ago.
Revenue rose 11% to 3.5 billion ringgit compared to 3.2 billion ringgit a year ago, on “significantly improved operational performance” that brought higher yields at lower costs, Haris said.
FGV expects the push by Malaysia and Indonesia to ramp up the palm oil blend in its domestic biodiesel supply will support CPO prices, which it hopes will hit a range of 2,400 to 2,800 ringgit in the first half of 2020 based on external estimates.
“This is something very exciting for people in the plantation business,” Haris said.
“We have had prolonged low prices for the last couple of years and this is something that will rejuvenate the industry as for Malaysia as well.”
In its sugar business, Haris said FGV was in advanced talks with a potential partner from China to pave the way for the export of excess sugar output destined for the domestic market.
FGV’s current sugar production capacity, at its subsidiary MSM Malaysia Holdings Berhad, stands at 2.25 million tonnes a year against domestic demand of around 1.6 million tonnes.
Haris said the deal will focus on the Johor refinery, which has a capacity of 1 million tonnes, offering an offtake of up to 700,000 tonnes to the Chinese partner for export.
“We will keep the 300,000 (tonnes) for our own export market, that is the plan.” ($1 = 4.1700 ringgit) (Reporting by Liz Lee and Mei Mei Chu; Writing by Joseph Sipalan; editing by David Evans)