KUALA LUMPUR (May 17): Ta Ann Holdings Bhd said the tight supply of natural logs is likely to uphold export log prices, while Japan’s plan to improve infrastructure will help sustain the group’s plywood exports.

Its executive chairman Datuk Amar Abdul Hamed Sepawi said the group remains cautiously optimistic about the performance of its timber division this year despite the various challenges in the industry.

He noted that the timber industry has seen a drop in business since the Covid-19 outbreak, adding that the pandemic has created obstacles to logistics and port congestions in buyer countries.

“Our group’s timber division was hit badly due to difficulties in logistic arrangements. However, the impact was greatly reduced as industry players were still allowed to operate during the movement control orders while adhering to new norms and SOP (standard operating procedures) related to Covid-19,” he added in his statement in the group's annual report.

Turning to palm oil, Abdul Hamed said the outlook for the current financial year ending Dec 31, 2021 (FY21) looks favourable compared with the average prices of FY19 and FY20.

“Palm oil supply may remain tight in FY21 as the ongoing international border closures and movement restrictions may further worsen the already severe labour shortage situation faced by the palm oil sector in Malaysia,” he said.

He added that with the roll-out of Covid-19 vaccination programmes worldwide, the global demand for palm oil, especially from India and China, will grow stronger in view of a gradual economic recovery and rise in edible oil consumption.

Abdul Hamed said Ta Ann expects its operating performance for FY21 to be satisfactory.

“Our group holds a positive outlook for FY21 although volatility remains present,” he said, noting that vaccination programmes worldwide, coupled with numerous economic stimulus programmes introduced by Malaysia and other countries have raised hopes of a rapid economic recovery

At 4.36pm, Ta Ann's shares were down eight sen or 2.67% at RM2.92, valuing the group at RM1.33 billion.