Astra Agro May Miss Full-Year Palm Oil Target, Executive Says
By Karima Anjani
Aug. 25 (Bloomberg)
PT Astra Agro Lestari, Indonesia’s biggest publicly traded agricultural company, may miss its full- year target for 920,000 tons of palm oil because of poor weather.
“Output may fall below 917,000 metric tons this year,” Finance Director Santosa said late yesterday. Still, “higher prices should offset lower output, therefore revenue in the second half will be higher than the first half.” Sales in the first six months were 2.4 trillion rupiah ($257 million).
Drought in the second half of last year affected crops throughout the country, with the impact also crimping harvests into this year. Lower palm oil production in the Southeast Asian nation, which with Malaysia produces 90 percent of the crop worldwide, may extend a rally in prices.
Strong demand for the tropical oil, used mainly in cooking and to make detergents, should keep the price above $700 a metric ton in the second half, said Santoso, speaking to reporters in Subang, West Java.
The executive didn’t say how by much full-year output may miss the Jakarta-based company’s target, which Astra Agro issued in February. Output was a record 917,885 tons in 2006.
Palm oil on the Malaysia Derivatives Exchange, which trades the benchmark contract, touched a record 2,764 ringgit a ton on June 6, and has averaged 2,245 ringgit ($646) a ton so far this year. The most-active contract ended yesterday at 2,430 ringgit.
The company’s palm oil output in the first seven months of the year declined 11 percent to 485,348 metric tons because of a smaller crop in Kalimantan, Astra Agro said Aug. 14. Kalimantan is the Indonesian portion of Borneo Island.
Source: http://www.bloomberg.com/apps/news?pid=20601080&sid=aGONoYJiIYrw&refer=asia
