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UPDATE 1-Malaysia's Sime Darby Plantation eyes palm oil output recovery, high prices

(Recasts with production outlook, updates with details and quotes)

KUALA LUMPUR, Feb 18 (Reuters) - Malaysia’s Sime Darby Plantation, the world’s largest palm oil planter, forecast crude palm oil output in Malaysia and Indonesia would recover from last year’s decline, and is optimistic prices will remain high this year.

Production of the edible oil in the top two producing countries fell last year due to extreme weather conditions and a coronavirus pandemic-induced labour shortage in Malaysia.

“This year we expect some recovery in (Malaysia’s) production, I expect not less than what we achieved in 2019,” group managing director Mohamad Helmy Othman Basha told a media briefing on Thurdsay.

While rising production may limit gains in Malaysia’s benchmark crude palm oil prices, the firm forecast prices would average 3,100 ringgit ($767.14) a tonne for the first half of the year and 3,000 ringgit in the second half.

The contract traded at 3,528 ringgit ($873.05) a tonne by Thursday afternoon.

“This year will be a respectably good year for palm oil,” said Sime Darby Oils managing director Mohd Haris Mohd Arshad.

The world’s largest palm oil planter by land size reported a net profit of 149 million ringgit ($36.91 million) for the Oct-Dec period, versus a net loss of 58 million ringgit in the year earlier quarter.

Revenue rose 8% to 3.64 billion ringgit.

The company discontinued operations in a joint venture and and recorded an impairment loss of 236 million ringgite.

Higher prices forcrude palm oil and a stronger contribution from the company’s downstream segment compensated for lower production last year, it said in a stock exchange filing.

“While the group continues to mitigate these challenges in 2021, one of our immediate priorities is to allay the concerns of our stakeholders over the Withhold Release Order issued recently by U.S. customs,” Mohamad Helmy said.

In December, the United States banned palm imports from Sime Darby over accusations of forced labour used in production, prompting some global palm oil buyers to drop it from supply chains.

The firm said it was working with independent bodies to tackle the accusations. ($1 = 4.0410 ringgit)

Reporting by Mei Mei Chu; Editing by Clarence Fernandez and Kim Coghill

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