Sipef: crude palm oil production up 16.5% in third quarter, 2026 result targeted above record
SIPEF published its activity report on October 15, 2026, at the end of September. Crude palm oil production showed an increase of 16.5% in the third quarter. The Belgian group has set its expected recurring result for 2026, group share, between 140 and 150 million dollars, a level it places above the record established in 2025.
This forecast is based on two quantified elements from the press release: volume growth, first in Indonesia, and contracted selling prices higher than those of the previous year. The dry conditions associated with El Niño remain, according to the group, an important determinant of the final production level in Indonesia as well as in Papua New Guinea.
Palm oil: +16.5% in third quarter, +10.4% over nine months
In the third quarter of 2026, SIPEF produced 136,927 tonnes of crude palm oil, compared with 117,565 tonnes a year earlier. Over the first nine months, production reached 359,357 tonnes, up 10.4%. The group's oil extraction rate stood at 24.2% in the third quarter, compared with 23.8% a year earlier.
Indonesia accounted for most of the growth, with production up 21.3% in the quarter and 13.7% over nine months. South Sumatra remains the primary driver: oil production there increased by 32.4% in the quarter and by 32.7% since January, as new areas reach maturity. Conversely, plantations on organic soils in Umbul Mas Wisesa, in North Sumatra, showed production of fresh fruit bunches down 6.1% over nine months.
In Papua New Guinea, oil production rose 5.6% in the quarter and 3.7% over nine months, despite an extraction rate reduced to 24.3% since January, compared with 24.7% a year earlier. Banana production in Ivory Coast increased 7.9% in the quarter and 8.9% over nine months, to 42,059 tonnes.
Contracted prices up and unit production cost down 1.6%
SIPEF has already contracted 86% of its budgeted palm oil volumes for 2026, at an average mill-gate price of 997 dollars per tonne, compared with 84% at 961 dollars a year earlier. In Papua New Guinea, the entire expected annual production is sold at 1,214 dollars per tonne. In Indonesia, 80% of planned volumes are contracted at 875 dollars per tonne, a price that includes an export tax and royalty set by the government, currently 308 dollars per tonne.
On the market, the average price of crude palm oil on the Kuala Lumpur exchange (MDEX) stood at 1,126 dollars per tonne over nine months, compared with 982 dollars a year earlier. On the cost side, the group reported increases in fertilizers, fuel and transportation.
Unit production cost nevertheless fell 1.6% compared with the first nine months of 2025, even though the share of production from higher-cost areas (South Sumatra, Papua New Guinea) is increasing. In bananas, the average CFR Europe price fell to 787 euros per tonne from 873 euros, but the group sells its production through annual fixed-price contracts with European customers, which limits its exposure to market prices.
Net financial position expected between 130 and 150 million dollars
For the full year, SIPEF anticipates crude palm oil production of approximately 470,000 tonnes, with additional potential depending on weather and operational conditions in the fourth quarter. The expected recurring result remains subject, according to the group, to price changes, achievement of planned volumes, Indonesian export taxes and production costs.
2026 investments are now estimated between 90 and 100 million dollars, with part of the replanting planned for the fourth quarter potentially being postponed to 2027 due to drought. The group also completed on September 30, 2026 the acquisition of 100% of the Ivorian plantation Tiabam, through its subsidiary Plantations J. Eglin: approximately 450 hectares, of which 320 in production, for an annual production of 12,000 to 14,000 tonnes of bananas, exported to more than 90% to Europe. Its contribution to the accounts will begin in the fourth quarter.
Operating cash flows must, according to SIPEF, fully finance investments and dividend, which amounted to 4.3 euros for the 2025 financial year. The net financial position, positive by 88.4 million dollars at end-2025, is expected between 130 and 150 million dollars at end-2026.
