Crude palm oil price drops
The global crude palm oil (CPO) price has dropped from US$834 (K2,823) per tonne cif Rotterdam in January to US$538 (K1,814) per tonne due to the Covid-19 impacting New Britain Palm Oil Ltd (NBPOL).
Group chief executive Jamie Graham described the fall over a very short period of time as something never seen in 30 years and that it would affect small holder farm gate prices.
“A lack of demand from a combination of factors, such as catastrophically low crude oil prices that have negated the price advantage of biofuels, the evaporation of the world wide hospitality industry, as well as the general malaise in consumer confidence have all contributed to this,” hr said.
“We have gone from looking at a real recovery from 2019 and a positive business outlook for 2020 to a much more pessimistic one.”
Graham further noted that there had been a “tremendously adverse” impact on the business.
“Quarantine requirements have also impacted the business with ships facing berthing delays through either congested ports or for requirements by provincial authorities that contradict the SOE directives.
“With ship owners charging US$20,000 (K67,464. 90) a day for demurrage,” he said.
“This hurts the bottom line and will affect our tax bill. “In January, CPO (crude palm oil) was US$834 (K2,808) per tonne cif Rotterdam, it is now US$538 (K1,811) per tonne."
“The fall in price is one of the most dramatic that I have ever seen in 30 years, it will of course affect small holder farm gate prices."
“As this is a world price, there is little the company can do about price.”
Graham said NBPOL could and was cutting costs and focusing on minimising expenditure.
“This of course includes expansion and new developments,” he said.