AGRIBUSINESS | Staff Reporter, Singapore

Should Bumitama Agri hope for better fresh fruit bunch yields?

But lagged impact from El Niño is still there.

Whilst the lagged impact from the severe drought in 2015 has not yet fully faded, Bumitama Agri should expect good fresh fruit bunch yields this year.

According to UOB KayHian, the 2Q17 fresh fruit bunch production could increase QoQ and register growth that is much stronger than 2Q16.

"Management indicated that 2Q17 production is still higher than 1Q17’s mainly supported by good weather conditions. If we conservatively assume that 2Q17 FFB production would be on par with 1Q17’s, the potential yoy FFB production growth would already hit 50% for the quarter," UOB KayHian stated, noting that as such, the 2Q17 production could easily go beyond a 50% YoY growth.

However, the brokerage firm said the impact of the drought is still there, pushing the normalisation of production to kick in in the second half of the year.

"The peak production is likely to come in 4Q17," UOB KayHian said. 

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