By Ashley Tang and Rajendra Jadhav
KUALA LUMPUR (Reuters) – One of the world’s biggest palm oil producers, FGV Holdings, expects output to rise between 1% and 3% in 2025 on the year, boosted by improvements in yields and oil extraction rate, its chief executive told Reuters on Wednesday.
The company’s efforts to replace old plantation has helped increase yields of fresh fruit bunches and the rate of oil extraction has also risen, promising higher crude palm oil output in 2025, said Fakhrunniam Othman.
“Our oil extraction rate (OER) is also improving, where we are targeting about 20.8% to 21% compared to last year’s value of 20.61%,” he said in an interview, referring to the proportion of oil extracted from fresh fruit bunches.
With oil palm plantations in Malaysia and Indonesia, FGC has a total area of 333,765 hectares (824,750 acres) planted to oil palm.
The company’s crude palm oil production jumped to more than 2.9 million metric tons in 2024, up from 2.62 million in 2023, Fakhrunniam said.
Palm oil’s current price premium over soyoil has led to lower demand from countries such as India and China, which will bring down prices in the later part of the year, he said.
Crude palm oil prices in 2025 are likely to average between 3,900 ringgit and 4,200 ringgit a ton, lower than the current price of about 4,600 ringgit, Fakhrunniam said.
Crude palm oil output in Indonesia, the world’s largest producer of the commodity, is likely to rise to 50 million metric tons in 2025 from 49 million a year ago, while Malaysia’s output is likely to rise marginally up to 19.6 million, he said.
“I think both countries for the full year will record a low single-digit improvement compared to last year,” he added.
Demand for sustainable palm oil has been prompting FGV to increase production compliant with European Union Deforestation Regulation (EUDR), which fetched a premium of $200 a ton for its first shipment dispatched last year, he said.
(Reporting by Ashley Tang and Rajendra Jadhav; Editing by Clarence Fernandez)
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