January 13, 2016 / 11:26 AM / 4 years ago

Malaysia's Sime Darby says dry weather could lower its palm oil, fresh fruit bunch output

KUALA LUMPUR, Jan 13 (Reuters) - Malaysia’s Sime Darby Bhd , the world’s largest palm oil planter by land size, says the drying effects of the El Nino and a prolonged drought could lower its palm oil and fresh fruit bunch production in its financial year 2015/2016.

Sime Darby Plantation has estimated that the El Nino weather effect and prolonged drought would affect about 6 percent of its palm oil production in Malaysia, and 8-10 percent in Indonesia in the next one to two years, the company told Reuters by email.

“The recent haze would have a similar compounding impact with the prolonged dry period affecting fruits and disrupting oil extraction as well as crop production,” said Franki Anthony Dass, managing director of Sime Darby Plantations, the plantation and agri-business arm of Sime Darby Group.

The company also expects to see a decline in fresh fruit bunch (FFB) production this year due to the El Nino impact. Forecasts for its Malaysian FFB output stood at 5.58 million tonnes, down from 5.94 million tonnes the year before, and forecasts for its Indonesian FFB output is seen at 2.75-2.81 million tonnes, down from 3.05 million tonnes a year ago.

Reporting by Emily Chow; Editing by William Hardy

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