Palm oil producer AEP Plantations Plc (AEP.L) reported Monday that its production of own fresh fruit bunch or FFB and Crude palm oil declined in the first five months of the year amid lower yields and replanting. The firm said the performance was supported by favourable average CPO prices.
Regarding the outlook, Chief Executive Kevin Wong Tack Wee said, "As we look to the remainder of 2026, we remain confident of achieving market expectations supported by the recent Pinago acquisition. As we look to the future, we are on track with our significant replanting programme, have an active pipeline of selectively identified brownfield assets in Indonesia and a strong balance sheet that provides full flexibility for continued growth, all of which is supported by the long-term demand fundamentals of CPO."
On the LSE, shares of AEP were gaining 3.73 percent, changing hands at 1,705.26 pence.
Further, the palm plantations operator in Indonesia and Malaysia said it expects minimal impact from Indonesia's new export framework as it sells only to domestic refineries. Full implementation of the framework is expected from January 1, 2027.
For the first five-months of 2026, own FFB production fell 2.7 percent year-on-year to 421,900 metric tons, citing lower yields in North Sumatra and Riau and a delayed cropping cycle.
External FFB purchases rose 6.5 percent to 524,000 tons, including one month's contribution from recently acquired Pinago Group.
Excluding Pinago, external FFB purchases increased 2.3 percent, driven by a 4.7 percent rise across other regions which offset a 2.4 percent decline in North Sumatra.
Crude palm oil or CPO production for the period declined 1.8 percent to 173,200 tons, primarily due to lower FFB processed from own estates.
Palm Kernel production was flat at 43,500 tons.
Average CPO ex-mill price fell 2.2 percent to $859 per ton, while average palm kernel ex-mill price rose 8.1 percent to $802 per ton. The average CPO ex-Rotterdam price was $1,416 per ton, broadly flat year-on-year.
The company attributed weaker yields to ageing palms, suspended fertiliser application in replanting areas, and reduced output in parts of North Sumatra. Stronger production in Kalimantan and the Pinago contribution partly offset the declines.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.