KUALA LUMPUR, Feb 28 — FGV Holdings Bhd is eyeing a better profit margin in the first half (1H) of 2025 as tight supply and demand from festivals is set to keep the crude palm oil (CPO) prices elevated, said group chief executive officer Fakhrunniam Othman.
He said the higher CPO prices are expected to range from RM4,300 per tonne to RM4,600 per tonne.
“Demand is also supported by festivals such as Ramadan, followed by the Hari Raya celebration,” he told reporters during the FGV 2024 Financial Results Announcement today.
Fakhrunniam said higher CPO prices are also due to seasonally lower Fresh Fruit Bunches (FFB) output, the rise in Indonesia’s biodiesel mandate and tighter supply of vegetable oils.
Group chief financial officer Datuk Mohd Hairul Abdul Hamid said production was low in January and February, with certain areas experiencing flooding towards the end of last year, which extended into the early part of this year with some regions, particularly in Sabah and parts of Pahang, still affected.
“That is affecting our productivity a little bit, and we are unable to harvest some of the crops on the trees,” he said.
However, Mohd Hairul opined a slight fall in CPO price in 2H 2025, to around RM3,800 to RM4,000 per tonne, due to increased production.
Regarding fresh fruit bunches (FFB) production, Mohd Hairul anticipated FGV’s production to grow five to eight per cent in 2025 compared to last year.
Commenting on concerns about the higher CPO price compared to soybean oil, Mohd Hairul noted that buyers may be inclined to switch to soybean oil as a more cost-effective raw material option.
“There was a bit of switching to soybean oil, especially from four-season regions like northern India. But we believe the switching is taking over to normalize the supply and demand at the prices eventually,” he said. — Bernama
