Sampoerna Agro says its palm oil output may jump 20 pct in 2014

Reuters

JAKARTA, Nov 29 (Reuters) - Annual output at Indonesian palmoil firm Sampoerna Agro could grow by as much as 20percent next year to about 1.7 million tonnes, helped byfavourable weather and maturing trees, a company official saidon Friday.

For the first nine months of 2013 production was 800,000tonnes and it is forecast to total 1.4 million for the year as awhole, Michael Kesuma, head of investor relations, told Reutersin an email. That is down from 1.7 million in 2012.

Output had been running around 30 percent lower than lastyear because of extreme weather conditions in recent years,especially on its South Sumatra estates, but had picked up.

"The full year estimation is 1.4 million tonnes, meaning aclosing of the gap from 30 percent to 20 percent in the finalthree months due to a surge in output," Kesuma said.

"For 2014, we expect a 10-20 percent increase in output,mainly due to more favourable weather happening so far this yearand a maturing age profile."

Last week, the Indonesian Palm Oil Board forecast that palmproduction in the world's top producer would jump 13 percent to29.5 million tonnes next year as more maturing plantation areasare harvested.

Malaysian palm oil futures jumped to their highestin more than a year in November and have gained about 8 percentin 2013 to trade at 2,653 ringgit ($820) per tonne.

After falling by about a quarter in 2012, prices turnedaround in the third quarter in anticipation of a rise in demanddue to a new biodiesel requirement in Indonesia and the prospectof lower-than-expected output by the dominant Southeast Asiangrowers.

Sampoerna Agro, part of the Sampoerna Strategic Group, istargeting palm plantation expansion of between 5,000 and 10,000hectares next year, Kesuma said. That compares with a total areaof 120,000 hectares (296,500 acres) at present.

The current plantation area and expansion plans includeplasma estates, which are owned by smallholders and often runwith the help of larger firms, who then take palm oil from thoseestates.

($1 = 3.2325 Malaysian ringgits) (Reporting by Michael Taylor; Editing by Alan Raybould)

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