Dekel Agri-Vision Plc (LON: DKL), the West African agriculture company focused on building a portfolio of sustainable and diversified projects, has provided a May production update for its Ayenouan palm oil project in Côte d’Ivoire the (‘Palm Oil Operation’), and an update on the timing of the ramp-up of production of our large-scale cashew processing plant at Tiebissou, Côte d’Ivoire (the ‘Cashew Project’).
Key Highlights
· The recent trend of very strong Crude Palm Oil (‘CPO’) and Palm Kernel Oil (‘PKO’) prices and exceptionally strong CPO extraction rates offset by weak fresh fruit bunches (‘FFB’) volumes continued in May.
· Further to the Company’s announcement of 9 June 2022, the colour sorter was shipped from China and arrived at Abidjan port, Côte d’Ivoire on 12 June. Once installed, this will enable the Company to materially increase production capacity.
| May-22 | May-21 | Change | ||
| FFB processed (tonnes) | 9,207 | 16,335 | -43.6% | |
| CPO Extraction Rate | 23.5% | 20.8% | 13.0% | |
| CPO production (tonnes) | 2,167 | 3,403 | -36.3% | |
| CPO Sales (tonnes) | 4,025 | 1,071 | 275.8% | |
| Average CPO price per tonne | €1,056 | €774 | 36.4% | |
| PKO production (tonnes) | 165 | 233 | -29.2% | |
| PKO Sales (tonnes) | 148 | 40 | 270.0% | |
| Average PKO price per tonne | €1,606 | €838 | 91.6% | |
| Palm Kernel Cake (‘PKC’) production (tonnes) | 251 | 385 | 34.8% | |
| PKC Sales (tonnes) | 138 | 151 | -8.6% | |
| Average PKC price per tonne | €85 | €80 | 6.3% |
CPO Production
· We saw improved rainfall in May which may have assisted with the very strong CPO extraction rate; however, FFB quantities remain low across the region.
· The CPO extraction rate achieved in May of 23.5% is close to a record extraction rate and together with high CPO prices is driving improved gross margins percentages compared to 2021.
CPO and PKO Price
· International CPO prices continue to remain at near record levels of around €1,500 per tonne and international prices remain significantly higher than local prices. We are now exporting a portion of our product to gain access to these higher prices; however, as is the case globally, there is pressure on food supplies in Côte d’Ivoire which means we also have obligations to support the local market.
· International PKO prices have recently stabilised around €1,600-1,700. Our current ex-factory price achieved of over €1,600 in May was a record monthly price.
CPO Sales
· May was a strong month in terms of CPO sales increasing 276% compared to May 2021. This is partly as a result of a portion of expected April sales taking place in May and also strong demand caused by local supply shortages resulting from the weak high season.
Cashew Project
· The colour sorter arrived on 12 June and will enable the Company to significantly increase production capacity once installed.
· As stated last month, the arrival of the colour sorter together with the utilisation of the shelling machines the Company already has on site should see production materially increase to over 50%.
· The first 11 of the 15 shelling machines are assembled and are expected to be delivered to the port in Italy shortly. Even if there are delays, we have sufficient substitute shelling machines on site that we purchased in case of this issue so this shipment should not present a significant bottleneck to the ramp up of production.
Lincoln Moore, Dekel Agri-Vision Executive Director, said: “It has been an extraordinary first 5 months of 2022 with record CPO prices and near record CPO extraction rates, coupled with the weakest high season volumes local industry experts have ever seen. Importantly, financial performance of the Palm Oil Operation has remained robust, driven by healthy gross margin percentages. Shipping issues continue to be a big challenge; however, with the colour sorter having arrived on 12 June, the Company will be able to ramp up production of the Cashew Operation. We look forward to providing operational and financial metric data as the operation settles into a rhythm.”
