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KUALA LUMPUR, Feb 18 -- Sime Darby Plantation Bhd (SD Plantation) is expecting crude palm oil (CPO) prices to recover strongly in the second half of the year following a three per cent drop in production and low stocks in 2020.
Group managing director Mohamad Helmy Othman Basha said although the industry is still facing challenges with a shortage of foreign workers, operations were manageable with the adoption of new technology and automation while tracking the oilseed performance in the United States.
For the first half of 2021, he said CPO price is expected to be RM3,100 per tonne on average.
"Heavy rains and flooding towards the end of last year and early this year in Malaysia and Indonesia were also supporting the prices.
"Overall, our projection remains that the CPO prices will move within the range this year," he said in a virtual media briefing on its results for the financial year ended Dec 31, 2020 (FY20), today.
As regards the US Customs and Border Protection's Withhold Release Order issued on Dec 30, 2020, against SD Plantation over allegations of forced labour in its palm oil plantations, he said the group has been engaging with petitioners Liberty Shared and other organisations to obtain details or evidence.
"We have yet to receive any details despite the effort that has been made.
“Most of the customers, including big multinationals corporations in the fast-moving consumer goods sector have not dropped us from their supply list or the value chain," he said, adding that engagements with customers were ongoing to ensure the latter have a clear understanding of the issues or allegations.
Mohamad Helmy said SD Plantation would not leave any stone unturned in seeking more information pertaining to the allegations.
"Our upstream business in Malaysia, Indonesia, Papua New Guinea and the Solomon Islands spreading across 600,000 hectares of plantation with almost 90,000 employees is a huge operation and may not be perfect.
"But when we find out cases that we do not condone happen, we will investigate and take action for justice to be done as our operations abide by the laws and all the standards that we have published," he added.