El Niño Impact Looms Over SD Guthrie's Palm Oil Production

Malaysia's leading palm oil company SD Guthrie expects its production to be impacted in 2027 and 2028 due to El Niño weather conditions. The drier and hotter weather, which typically follows a 12-to-16-month lag, is expected to affect the country's palm oil output. In contrast, production for the rest of this year is not anticipated to be significantly affected.

The company posted a net profit of MYR987M (US$241.3M) for the April-June period, nearly double the previous year's MYR505M (US$124.3M). Despite this increase in profitability, revenue declined from MYR5.17bn (US$1.27bn) to MYR4.94bn (US$1.21bn).

CPO prices are expected to range between MYR4,600-MYR5,000 (US$1,133-1,231)/tonne for the remainder of this year and potentially rise to MYR5,200 (US$1,280)/tonne in the first quarter of next year. The company's global trading CEO noted that supply-side pressures are likely to intensify due to El Niño conditions.