18 months
January 7th, 2020
⏰ 1 minute read
⏰ 1 minute read
December
Happy new year 2020! First up a quick look back at what’s happened at the end of 2019. Fruit production for December was just under 130k tons. That’s lower than a year ago & the growth rate for the 4Q was about -15%. But that’s much better than the -30% we were running at by August/September. What do we expect in 2020?
2019
First let’s put the production into a broader context. For the full year 2019, production was 1.5m tons which is about 17% lower than 2018’s 1.8m. But palm oil production is very long term by nature & fluctuates over periods longer than one year. The fruit growth cycle can be up to 2 years or eve longer.
18m
2 years is a bit too long to look at our data which starts from 2015, so we will use 18 months, half way between 1 & 2 years. The 18 month fruit production as of December is at 2.6m tons which is about 144k tons a month. That’s almost exactly the average of the last 3 months of 4Q. 2.6m is 30% higher than the 2m tons, or an average of 110k tons a month, at the end of 2017.!
Strategy
What’s improving the production? First, we have prime age trees so the productivity can increase naturally. Second in 2018, as you might remember, we changed our bonus system for harvesters to reward them for higher productivity. Third, inIn the second half of 2019 we have also worked hard to reduce the losses of fruit left behind. Focusing on better quality oil has also helped to reduce losses as fruit is harvested for perfect ripeness so there’s less loose fruit (which is more easily lost).
2020
As we start 2020, what’s encouraging is that the first few days of production points to close to 130k tons again for the month, which would mean the end of negative growth from a year ago. If we take our expectation for the full year & add the last 6 months of 2019 to get the 18 months, the total would rise to 2.7m tons or an average of 150k tons a month & a new record 18 month high. That’s an exciting outlook.
Sebastian
Happy new year 2020! First up a quick look back at what’s happened at the end of 2019. Fruit production for December was just under 130k tons. That’s lower than a year ago & the growth rate for the 4Q was about -15%. But that’s much better than the -30% we were running at by August/September. What do we expect in 2020?
2019
First let’s put the production into a broader context. For the full year 2019, production was 1.5m tons which is about 17% lower than 2018’s 1.8m. But palm oil production is very long term by nature & fluctuates over periods longer than one year. The fruit growth cycle can be up to 2 years or eve longer.
18m
2 years is a bit too long to look at our data which starts from 2015, so we will use 18 months, half way between 1 & 2 years. The 18 month fruit production as of December is at 2.6m tons which is about 144k tons a month. That’s almost exactly the average of the last 3 months of 4Q. 2.6m is 30% higher than the 2m tons, or an average of 110k tons a month, at the end of 2017.!
Strategy
What’s improving the production? First, we have prime age trees so the productivity can increase naturally. Second in 2018, as you might remember, we changed our bonus system for harvesters to reward them for higher productivity. Third, inIn the second half of 2019 we have also worked hard to reduce the losses of fruit left behind. Focusing on better quality oil has also helped to reduce losses as fruit is harvested for perfect ripeness so there’s less loose fruit (which is more easily lost).
2020
As we start 2020, what’s encouraging is that the first few days of production points to close to 130k tons again for the month, which would mean the end of negative growth from a year ago. If we take our expectation for the full year & add the last 6 months of 2019 to get the 18 months, the total would rise to 2.7m tons or an average of 150k tons a month & a new record 18 month high. That’s an exciting outlook.
Sebastian
Data is in the data file here