First Resources' fresh fruit bunch could tumble 10% in 4Q

This would also mean a 7 % drop in crude palm oil yield.

First Resources’ own fresh fruit bunch (FFB) output for 3Q rebounded 43% q-o-q to 1.6m MT, but still 11% behind last year, as delayed impact of 2015 El Nino dissipated.

For the quarter, FFB yield had rebounded to 5.0 MT/ha from 3.5 MT/ha in 2Q16 – but still below 6.0 MT/ha in 3Q15. FFB output from smallholders had likewise rebounded 59% q-o-q and surpassed last year’s number by 14%. These translate to 9M16 crude palm oil (CPO) output of 429k MT.

Moving forward, DBS expects First Resources to continue recovery in 4Q16 output, albeit at a slower space.

"We expect the group’s FFB output to peak in October, before seasonally declining again towards the end of the year. For this reason we maintaining own FFB production target of 2.3m MT – representing 10% y-o-y decline," said the research house.

The estimate should translate to CPO production of 637k MT (-7% y-o-y) for the full year, or 208k MT of CPO production in 4Q16 (+14% q-o-q).