Sri Lanka Carsons readies for palm oil price correction

May 26, 2008 (LBO) – Sri Lanka’s Carson Cumberbatch group said efficiency improvements and expanded cultivation in its oil palm estates in south-east Asia should help it remain competitive when prices fall off current record highs. The palm oil industry had a good year with prices at record levels owing to strong demand, mainly because of rapid economic growth in countries with large populations like China and India, said Hari Selvanathan.

But the industry should be ready and remain competitive when natural corrections occur in the price cycle, he told shareholders of Good Hope and Indo-Malay, two Carson subsidiaries of which he is chairman.

Good Hope net profit shot up to 136 million rupees for the financial year ended March 31, 2008 from 22 million the year before, mainly because of the increase in prices while production also increased by 28 percent.

“The current high prices (being at the higher end of the historical price cycle) prompts the need to accelerate expansion to benefit from the positive outlook,” Selvanathan said in the firm’s annual report.

The need to build the required volumes, capacities and internal readiness to sustain cost competitiveness in a commodities market “cannot be overlooked, especi