15th Jun 2018 12:31
LONDON (Alliance News) - MP Evans Group PLC said its production rose in the year to date, supported by higher prices, but warned that the achieved recovery in south east Asian production may exert some downward pressure on prices in the second half of 2018.
Ahead of the company's annual general meeting on Friday, Chairman Peter Hadsley-Chaplin said that the continuing recovery in south east Asian palm oil production "may exert some downward pressure on prices during the second half of the year, but this is likely to be counter balanced by a poor South American soybean harvest".
For the five months ended May 31, the average price of crude palm oil was USD663 per tonne, which was 9.4% lower than the USD732 in the same period last year.
The Indonesian Rupiah has weakened during 2018, which has resulted in an exchange rate loss, MP Evans said. However, the company benefited through a reduction in the US dollar cost of producing crude palm oil.
MP Evans produced 77,500 tonnes of crude palm oil during the period, up 22% from 63,500 tonnes last year. An important contribution to production was the continuing purchase of fresh fruit bunches from third parties, amounting to 46,700 tonnes in addition to those produced on the group's own estates and associated smallholder co-operatives.
Crops of oil-palm fresh fruit bunches increased 27% to 228,000 tonnes from estates controlled by the company, compared to the 180,000 tonnes recorded for the same period in 2017.
Crops from the smallholder co-operatives associated with the group's new projects increased by 39% to 61,100 tonnes.
Looking ahead, Hadsley-Chaplin said the company continues to seek to expand its plantation hectarage and is confident in its ability to deliver crop growth which is the foundation for improving results, and increasing dividends, to shareholders.
The stock was trading 1.1% lower at 740.00 pence per share on Friday.
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