Interim statement of the SIPEF group per 31 March 2018
After the strong rise of 11.2% in Group palm oil production in 2017, in the first quarter of 2018 we again recorded growth of 3.5% at our own plantations, primarily driven by an 11.4% increase in volumes produced in Indonesia, where the Group’s palm oil business in North and South Sumatra and Bengkulu enjoyed generally favourable weather and the young areas in particular contributed to the continued improvements in the efficiency of our planted hectares.
A reduction in fruit bunch formation was noted as early as the end of last year in Papua New Guinea, especially in the older plantings. The usual intense rainfall in January and March also rendered harvesting and transport more difficult and we recorded a slight reduction in oil extraction percentages due to the higher water content in the processed fruit.
As a result, the production in our own plantations fell by 11.4% compared with the same quarter last year, when rainfall was exceptionally low. Due to the higher average age of their plantations, neighbouring farmers were even more susceptible to this phenomenon and we recorded a 31.9% fall in their production in the first quarter.
The Group‘s total palm oil production fell by 3.3% compared with the first quarter of 2017. For the young plantations in expansion areas where we do not yet have any processing plants of our own, we obviously recorded a strong rise in volumes of Fresh Fruit Bunches (FFB) due to the growing maturity of the planted areas.
As reflected in our group productions, the own production of FFB rose by 3.3% compared with the same period a year ago. Due to the usual wintering period in the first half of the year in the rubber plantations in Sumatra, Indonesia, the first-quarter production figures are variable and production at the plantations in North Sumatra (-18.7%) fell temporarily earlier than a year ago, whereas volumes were boosted at the young plantations in Agro Muko in Bengkulu province due to additional maturity (+28.2%).
As a result, the Group’s total rubber production fell slightly by 1.7% compared with the same period a year ago. Just like last year, the tea plantations in Java, Indonesia, experienced a difficult start to the year, with few sunshine hours in January and February, which hampered leaf development. Due to better growing conditions in March, first quarter production is 3% higher than a year ago.
The weather in Ivory Coast was certainly not ideal for banana production in the first quarter, as the Harmattan winds in January and February delayed the flowering of the banana trees. There was organic production growth in the new planted area Azaguié 2 (+51.4%), but production in the other three mature plantations were clearly below expectations, resulting in a 10.1% fall in group production in the first quarter of this year.