AEP Plantations sees palm oil prices supported in Q4 as production rises

(Sharecast News) - Palm oil producer AEP Plantations said it expected prices to remain supported through the final quarter of 2026, underpinned by food demand, firm energy markets and Indonesia's B50 biodiesel rollout, which is expected to strengthen domestic consumption. The company which owns and operates plantations in Indonesia and Malaysia, reported a 13.3% rise in production for the nine months to September 30 to 924,000 tonnes driven by stronger output in Kalimantan and the recently acquired PT AEP Pinago Plantations in South Sumatra.

The group replanted 1,785 hectares and completed more than 430 hectares of new planting during the period, remaining on track to meet its five-year target of replanting around 10,000 hectares to support long-term productivity and yield growth.

Construction of AEP's ninth palm oil mill at KAP Estate in Kalimantan is nearing completion, with commissioning targeted for early January 2027. Building and structural works were 98% complete at the end of September, while all machinery had been delivered to site by early October.

Elsewhere, rehabilitation work at JJU Estate is progressing, with development and new planting expected to be carried out in phases as approvals are secured. The project is expected to take three to five years to complete.

The group also flagged the risk of lower fresh fruit bunch yields in 2027 due to El Niño conditions and prolonged dry weather, although it reported no material fire-related disruption to operations. It added that any weather-related hit to production could tighten crude palm oil supply and lend support to CPO prices.

Reporting by Frank Prenesti for Sharecast.com