Malaysia’s Sime Darby to expand palm cultivation beyond Asia

11 February 2011 08:12  [Source: ICIS news]

SINGAPORE (ICIS)--Malaysia’s Sime Darby Plantation plans to expand its global palm cultivation in 2011 to address southeast Asia’s palm oil shortage, a Malaysian palm trader said on Friday.

“The company has revealed plans late last month that it would start its maiden palm oil planting in Liberia by April, using 10,000 hectares out of 220,000 hectares of concession land,” a source close to the company said.

In addition, Sime Darby Plantation would use the remaining 100,805 hectares out of 631,792 hectares of privately owned land in Indonesia and Malaysia to cultivate more palm trees, the source said. In total, 530,987 hectares had already been cultivated for palm in both countries, the source added.

Bad weather conditions arising from the La Nina weather patterns in southeast Asia had resulted in a shortage of palm oil and prices had remained mostly volatile since the fourth quarter of 2010, palm oil traders said.

Most palm oil plantation owners in Indonesia and Malaysia are looking outside Asia to cultivate palm trees in other regions where the climate is relatively stable, but similar to southeast Asia, a Singaporean-based palm oil trader said.

“Africa and [the] Middle East are a few hotspots for palm oil cultivation due to the resemblance of the climate with southeast Asia. Sime Darby is one of the pioneers in trying to cultivate palm oil plantations outside Malaysia,” the trader added. 

Sime Darby owns eight refineries in Malaysia, Singapore, Thailand, Vietnam, the Netherlands and South Africa. It is the world’s largest palm oil producer, with an annual output of about 2.4 million tonnes or 6% of the world’s crude palm oil (CPO), according to its website.

CPO was traded on Bursa Malaysia at ringgit (M$) 3,966/tonne ($1,300/tonne) during the morning session on 11 February.

($1 = M$3.05)

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By: Serena Seng

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