Dekel Agri-Vision Plc (LON:DKL), the West African agriculture company focused on building a portfolio of sustainable and diversified projects, has provided a February production update for its 100%-owned Ayenouan palm oil project in Côte d’Ivoire.
Highlights
· February represents a sixth consecutive month of double-digit increases in monthly crude palm oil (CPO) production, sales and prices compared with the same month last year:
o 43% increase in CPO production to 5,163 tonnes
o 36% increase in CPO sales to 4,754 tonnes
o 17% increase in average realised prices to €792 per tonne
· Strong margins currently being generated at Ayenouan as a result of international CPO prices trading at near 10-year highs in a band between €850-900 per tonne
· Peak harvest season currently underway and Dekel is increasingly confident that 2021 yields will be higher than 2020
Lincoln Moore, Dekel’s Executive Director, said: “We have made a terrific start to the financial year due to a combination of global prices trading at multi-year highs and a strong start to the peak harvest season. In addition, the construction of the large-scale cashew project at Tiebissou is advancing well. Commissioning is currently scheduled for June 2021, and we expect as this operation settles, it will drive a further step up in financial performance over the next 12-24 months. We believe this is an exciting period for shareholders as we see our growth strategy come to fruition.”
| Feb 2021 | Feb 2020 | Change | |
| FFB processed (tonnes) | 23,638 | 16,547 | 42.85% |
| CPO production (tonnes) | 5,163 | 3,615 | 42.82% |
| CPO sales (tonnes) | 4,754 | 3,501 | 35.79% |
| Average CPO price/tonne | €792 | €676 | 17.16% |
| PKO production (tonnes) | 270 | 210 | 28.57% |
| PKO sales (tonnes) | 406 | nil | n/a |
| Average PKO price/tonne | €778 | nil | n/a |
| PKC production (tonnes) | 390 | 336 | 16.07% |
| PKC sales (tonnes) | 299 | 307 | -2.61% |
| Average PKC price/tonne | €69 | €65 | 6.15% |
Crude Palm Oil Production
· 43% increase in CPO production in February compared to February 2020 builds on strong January performance during which production grew 52% compared to January 2020
· February production driven by 43% increase in fresh fruit bunches (‘FFB’) delivered to the mill for processing compared to February 2020
· Peak harvest season in Côte d’Ivoire is currently underway and Dekel is increasingly confident that 2021 yields will be higher than 2020
· CPO extraction rate of 21.8% achieved – in line with February 2020
CPO Pricing and Sales
· 17% increase in average realised CPO prices to €792 per tonne (February 2020: €676) and 36% increase in CPO sales to 4,754 tonnes (February 2020: 3,501 tonnes)
· Strong margins currently being generated at Ayenouan as a result of international CPO prices trading at near 10-year highs in a band between €850-900 per tonne – approximately 100% higher than Q2 2020’s pandemic-induced lows
· Local industry initiative currently in place, and supported by Dekel, to shield the local population partially from current very high global prices for CPO, a vital food source in Côte d’Ivoire. This is being achieved by smoothing out prices around €800 per tonne. The intention is that local prices will hold around this level even if international prices soften in the months ahead below the €800 mark. Critically, the directors believe this means Dekel has now potentially locked in very high prices for the remainder of the high season and possibly beyond.
Palm Kernel Oil (‘PKO’) Production and Sales
· 29% increase in Palm Kernel Oil and 16% increase in Palm Kernel Cake production to 270 and 390 tonnes respectively in February 2021 compared to February 2020 due to higher FFB volumes
· PKO sales exceeded production as Dekel capitalised on rising local PKO price levels to sell stock held in tanks during January at a pricing level 17% higher than achieved in January
· Dekel continues to assess export opportunities to achieve even higher PKO prices
Production Updates
Dekel Agri-Vision will continue issuing CPO production figures on a monthly basis to provide shareholders with visibility on operations and trading during the global COVID-19 pandemic.
