AGRIBUSINESS | Staff Reporter, Singapore

Why Bumitama Agri can expect better fruit bunch yields

Its recovery from El Niño is now on track.

After it endured El Niños lashes, Bumitama Agri may now breathe a sigh of relief as its fresh fruit bunch (FFB) segment is expected to grow at a double digit pace in the next period.

According to RHB Research, the drought impact on the group's estates has moderated significantly in 3Q16.

"While we maintain our -13% YoY projection for FFB output in FY16, we highlight that this could be conservative given 9M16’s production decline of -10.7% YoY," the firm stated.

RHB said the agri group's FFB output may see a 17% to 20% increase starting FY17, without any unforeseen weather conditions and given the group's plantations' rising mature hectarage.

"We highlight that the probability of La Nina continues to decline, and is now at 58% (from 65% last month) for 4Q16/1Q17," RHB noted. 

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