CEO: Up to 300,000 tonnes of palm oil ‘possible’ this year
CEO: Up to 300,000 tonnes of palm oil ‘possible’ this year
Crop-friendly weather is set to underpin growth in Cambodia’s output of crude palm oil beyond prior estimates, industry insiders have said.
The oil palm, also known by its botanical name Elaeis guineensis, is a tropical plant cultivar which is said to have originated in the ancient rainforests of West Africa.
Indonesia, Malaysia and Thailand are the main forerunners of the edible oil, which is widely consumed as food, animal feed, an energy source, as well as pharmaceutical and cosmetic products.
Mong Reththy, the president and CEO of agro-industrial conglomerate Mong Reththy Group Co Ltd, Cambodia’s largest producer of palm oil, told The Post on Monday that harvests are set to exceed previous forecasts.
“Previous projections showed that our yields would reach approximately 270,000 tonnes in 2020, but in reality a figure of up to 300,000 tonnes is possible.
“Regrettably, our two palm oil mills are not capable of handling all the raw palm fruit, which leaves enough fruit to produce 5,000 tonnes of palm oil to rot in the plantation, leading to a massive waste of money,” said Reththy.
He dismissed the idea that Covid-19 response measures – such as a reduction in the production line or cutting staffing hours – were behind the wasted organic materials, saying that the mills were simply unable to grind the palms on time.
He added that his company currently has no plans to invest in another mill given due to their exorbitant price tag, which he estimated at around $40 million for a facility capable of processing 45 tonnes of fruit per hour.
Minister of Agriculture, Forestry and Fisheries Veng Sakhon told The Post that a weak market has seen farmers shift away from oil palm trees to banana cultivation, which boasts a stronger market. Nowhere was the change more noticeable that in Ratanakkiri province.
Investment in oil palm is very limited, given the lack of cultivation in Cambodia, he said, noting that exporters generally favour shipping raw materials to the international market over their processed products.
“Our oil palm does not yet have a brand on an international scale,” said Sakhon.
Mong Reththy Group was established on January 1, 1989 and its subsidiary Mong Reththy Investment Cambodia Oil Palm Co Ltd was granted a land concession for an oil palm plantation on January 9, 1996.
The group now owns 20,000ha in plantation area in the Kingdom.
In 2000, the company invested in its first oil palm mill with the capacity of producing 30 tonnes palm oil per hour, and in 2015 built a second mill with a 45 tonne-per-hour processing capacity.
It previously exported the crude palm oil to Thailand and Malaysia but now ships to European markets.
Reththy said his company’s palm oil exports are performing well as usual. About 96 per cent of its palm oil products are exported to the EU market, while the remaining four per cent is mixed into animal feed for domestic use.
This year, palm oil is going for about $540 per tonne on the wholesale market, eclipsing last year’s rate of nearly $100 per tonne, he said.
Though Cambodia currently imports all of its cooking palm oil, Reththy said a cooking oil mill would not be cost-effective without 30,000ha of oil palm.
