KUALA LUMPUR, May 31 — SD Guthrie Bhd (formerly Sime Darby Plantation Bhd) expects crude palm oil (CPO) prices to remain fairly supportive, averaging above RM4,000 per tonne this year, said group chief operation officer Mohd Haris Mohd Arshad.

He said this is mainly driven by the limited supply issue from Indonesia due to the weather’s impact on the country.

"We must also take cognisance of the fact that palm is now cheaper relative to soybean and relative to sunflower, which was not the case in the early part of the year.

"So, given that palm is the cheapest oil relative to others, we expect production to still be an issue from Indonesia. Hence, we expect prices to remain fairly supportive,” he told a press conference in conjunction with the company’s first-quarter results announcement here today.

Commenting on La Nina and El Nino weather affecting the crops, he said that El Nino did not really have much of an impact on Malaysia, but it certainly had an impact on Indonesia.

"So what we are seeing right now is the impact of El Nino. Yes, we do expect La Nina to come (in the second half of the year).

"That is a very much welcome relief, but the impact of La Nina is not going to be from this year. So, we expect recovery to happen 12 months or 30 months out from today,” he added.

In a filing with Bursa Malaysia, the company stated that moving forward, SD Guthrie expects CPO prices to remain supported in the near term due to continued geopolitical tensions and the anticipated effects of extreme weather events in producing countries, which may impact the supply of vegetable oils globally.

Meanwhile, replying to the question on foreign labour reliance, group managing director Datuk Mohamad Helmy Othman Basha said that before the Covid-19 period, SD Guthrie was like other companies with a local: foreign worker ratio of 20:80.

"We now have 30 per cent local workers and 70 per cent foreign workers, so we have improved,” he said.

On May 10, Prime Minister Datuk Seri Anwar Ibrahim urged the group to be a supporter and pioneer of the government’s efforts to reduce dependency on foreign labour in the plantation sector.

Anwar said the approach and technological advancement used by the plantation company should be emulated as a model by smallholders in the future. — Bernama