Dekel confident as palm oil production continues recovery
Dekel Agri-Vision (DI)
West African palm oil and agriculture company Dekel Agri-Vision reported a 26.1% month-on-month improvement in fresh fruit bunches processed in October on Thursday, to 7,661 tonnes, although that was down 34% from a year ago.
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The AIM-traded firm also recorded an improvement in crude palm oil extraction rates to 21.8%, compared to 21.3% in September and 20.1% in October last year.
However, like-for-like monthly crude palm oil production volumes remained low compared to the record monthly production of October last year, falling 28.1% to 1,677 tonnes.
Dekel said crude palm oil prices remained “very strong”, with prices achieved continuing at close to all-time highs at €1,057 per tonne, up 10.1% year-on-year.
International crude palm oil prices increased materially during October from around €950 per tonne to between €1,100 and €1,150 per tonne, the board reported.
The cashew operation, meanwhile, saw a “significant” capacity increase during October, and was “well on track” to meet its 2023 objective of processing 10,000 tonnes of raw cashew nuts.
Dekel completed its first cashew export container shipment to Europe of 16 tonnes in late October, the directors added, at an average price of around €4,900 per tonne.
“We believe we are entering an exciting period in terms of potential revenue and profit uplift,” said executive director Lincoln Moore.
“With the palm oil operation high season only 90 days away it is pleasing to see signs of gradual normalisation of fresh fruit bunch levels.”
Moore said that, given the continued high crude palm oil prices, there was potential for an “exceptional period of profitability” during the first half of 2023, if normalised fresh fruit bunch levels were achieved.
“In addition, the cashew operation is well poised to add additional profit to the group as production continues to ramp up.”
At 1343 GMT, shares in Dekel Agri-Vision were up 2.5% at 3.08p.
Reporting by Josh White for Sharecast.com.