KUALA LUMPUR (June 11): Even with elevated crude palm oil (CPO) prices expected to remain high for the rest of the year, SD Guthrie Bhd (KL:SDG) is keeping its options open for plantation acquisition opportunities, according to its president and group chief executive officer.
The world's largest palm oil producer by acreage expects CPO prices to stay elevated amid the El Niño phenomenon, which could tighten supply due to hot and dry weather conditions.
President and group CEO Mohd Haris Mohd Arshad said prices are expected to average around RM4,700 this year. CPO futures were up at RM4,606 on Bursa Malaysia Derivatives on Thursday at the time of writing.
Meanwhile, Haris said the group remains on the lookout for attractive plantation acquisition opportunities.
Responding to The Edge’s report last month that the company is among the parties vying for Boustead Plantations Bhd, Mohd Haris said the group is open to deals but declined to comment on specifics.
“We are always on the lookout for attractive deals, but we can’t comment on the status at this point,” he said.
“While we are continuously seeking growth through land acquisitions, there are also other considerations,” he told reporters after the group’s annual general meeting on Thursday. “If there is an opportunity for us to acquire plantation assets, we would be interested.”
CPO prices remain up more than 12% year to date, underpinned by higher biodiesel mandates as governments push for greater palm-based methyl ester blending to cushion rising petroleum costs amid geopolitical tensions in the Middle East.
The roll-out of biodiesel programmes in Malaysia and Indonesia, together with stronger US biofuel requirements, is expected to continue supporting palm oil demand.
Last month, The Edge reported that the Armed Forces Fund Board (LTAT) is seeking buyers for its wholly owned unit Boustead Plantations. SD Guthrie and tycoon Tan Sri Syed Mokhtar Albukhary’s privately held Tradewinds Plantation Bhd are said to be among the contenders for the asset, in a deal estimated at between RM2 billion and RM3 billion.
LTAT, which took Boustead Plantations private in 2024, is understood to be managing the sale process internally. The company was delisted from Bursa Malaysia’s Main Market on Jan 23, 2024.
Shares of SD Guthrie settled one sen or 0.17% higher at RM6.04 at Thursday’s noon break, giving it a market capitalisation of RM41.77 billion.