PALMOILMAGAZINE, KUALA LUMPUR — Malaysian plantation company SD Guthrie Bhd remains optimistic that rising crude palm oil (CPO) prices will help cushion increasing production costs, as elevated global energy prices continue to reshape market dynamics.
In a recent report, CIMB Securities Sdn Bhd highlighted that the company is facing higher diesel costs, particularly in its Papua New Guinea operations, along with potential delays in shipments to the Middle East. However, its overall exposure to the region is considered relatively limited.
The report noted that fertilizer costs for 2026 have already been secured, with ongoing coordination between the company and suppliers to ensure timely delivery. Fertilizer accounts for around 27–28% of total direct costs, while diesel contributes less than 5%.
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“Management stated that fertilizer costs for 2026 have been locked in, and discussions are currently underway with suppliers to ensure timely delivery,” wrote CIMB Securities in the report, as quoted by Palmoilmagazine.com from the New Straits Times on Wednesday (March 18, 2026).
Despite the rising cost pressures, the outlook for CPO prices remains supportive. The company believes that higher palm oil prices—driven in part by elevated energy prices—will likely offset increased operational expenses.
Sustained high energy prices, linked to prolonged tensions involving United States and Iran, are expected to encourage major producing countries to expand biodiesel mandates, thereby strengthening demand for palm oil.
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In addition, SD Guthrie has secured forward sales contracts for about 42% of its Malaysian palm oil production at an average price of around RM4,400 per ton, providing some revenue visibility amid market volatility.
While the company’s outlook remains relatively stable, CIMB Securities has maintained a “Hold” recommendation on the stock, reflecting a cautious stance as global energy uncertainties and operational risks continue to influence the sector. (P2)
