PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 13:32 UK, 18th Aug 2014, by Agrimoney.com
Africa palm oil groups acknowledge Ebola threat

Palm oil minnow Equatorial Palm Oil followed giant Sime Darby in revealing concerns over the spread of the Ebola virus in West Africa but forecast a "successful" 2014 despite the lack of any revenues so far.

The group said that, while ebola had not spread onto, or near, its palm oil estates in Liberia, that it was in talks with the government and international authorities over the fatal virus, against which is has introduced a "number of preventative measures".

These include "screening points" in health clinics and briefings to the group's 1,200 workers, besides donation of medical equipment to local authority clinics.

The comments follow the announcement by Sime Darby, the world's biggest listed palm oil producer, that it is slowing production of the vegetable oil in Liberia, because of the spread of Ebola.

Malaysia-based Sime Darby, which operates Liberia's biggest oil palm plantation, has said it will continue to pay its 3,000 staff in a West African country which has seen the vegetable oil as a means of promoting economic growth.

Indeed, West Africa has offered palm oil giants hope of maintaining plantation expansion, with supplies of fresh, suitable land within the equatorial belt of South East Asia running low, and South American growers largely turned to other crops.

However, many companies operating in West Africa, ranging from miner Randgold to security services company Westminster Group, have already acknowledged a threat from the virus, which has killed 1,145 people since February, including more than 400 in Liberia, according to the World Health Organization.

 'Palm oil prices will improve'

Michael Frayne, the Equatorial Palm Oil chairman, said that he remained upbeat over prospects for the palm oil sector, in Liberia and globally.

"The growth in the palm oil market continues to be underpinned by compelling demographic and macro-economic trends," he said, adding that was "confident that palm oil prices will improve as a result of limited supply and continuing strong demand".

Palm oil futures in the benchmark Kuala Lumpur market touched 2,083 ringgit a tonne on Monday, the lowest for a benchmark contract since October 2009.

Meanwhile, Liberia "remains politically stable under democratic rule".

The group was looking forward to a "successful 2014, delivering on our strategic objectives and creating shareholder value".

Zero revenues

The comments came as the group unveiled a loss of $429,000 for the first half of 2014, down from a loss of $1.70m the year before despite a drop in revenues to zero, from $35,000 a year before.

The group's efforts to exploit its palm oil plantations in Liberia have been hampered by funding squeeze, although this was resolved in April by cash support from Kuala Lumpur Kepong, another major Malaysia-based palm oil group.

"Equatorial Palm now sits in a significantly stronger position as opposed to the same time last year," Mr Frayne said.

The deal with Kuala Lumpur Kepong "securing the $35.5m of cash and funding commitments was the key for resumption of normal operations at the Liberian estates".

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