Interim statement of the SIPEF group per 30 September 2018
• Own palm oil production for the Group was up 11.5% during the third quarter, resulting in an increase of 8.4% by the end of September.
• There was a sharp rise in own palm oil volumes from the Indonesian plantations (+11.3%), while the first-quarter production fall in Papua New Guinea was offset in full (+1.8%).
• Good harvests and high stocks in the main vegetable oils led to a quarterly fall in the price of almost USD 100 per tonne on the spot market for palm oil, ending at USD 540 per tonne CIF Rotterdam at the end of September.
• Rising biodiesel production, linked to higher crude oil prices, and the blending program in Indonesia will support the demand for palm oil in the fourth quarter and gradually reduce stocks toward the beginning of 2019.
• To date, SIPEF has sold 78% of its 2018 palm oil production at USD 694 per tonne CIF Rotterdam, premiums included.
• In spite of rising volumes and efficiency improvements, the expectations of continuing lower palm oil prices in the fourth quarter will corrode the recurring result for the second half of the year. The annual results for 2018 will therefore be substantially lower than they were for the financial year 2017.
• The investment programs within the context of expansion in South Sumatra, Indonesia continued steadily with 10 278 hectares cultivated in Musi Rawas and the commencement of the limited replanting and expansion of Dendymarker.