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LONDON (Alliance News) - Palm oil producer Dekeloil Public Ltd said on Wednesday it saw a decline in product sales but an increase in production due to a region-wide recovery in fresh fruit bunch volumes to more seasonal levels in the Ivory Coast.
Crude palm oil production in the three months to the end of September was 5,371 tonnes, up 14% from 4,734 tonnes for the same period the year before.
However, average crude palm oil prices fell by 17% to EUR544 per tonne from EUR655 the prior year, and sales fell by 24% to 5,471 tonnes from 7,217 tonnes. This was due to less inventory on hand at the interim, following 2018's meagre high-season production.
Palm kernel oil production also rose by 13% to 526 tonnes from 464 tonnes the year before, but average prices fell to EUR691 per tonne from EUR904 and sales dropped to 578 tonnes from 704 tonnes a year prior.
Fresh fruit bunches collected rose 15% to 24,938 tonnes in the third quarter from 21,626 tonnes a year before.
Dekeloil said the pricing environment for crude palm oil and palm kernel oil has remained very challenging due to international prices trading at ten-year lows.
"Having increased the mill's capacity in time for the 2018 peak harvesting season, we are ready to maximise production in 2019 should the recovery in yields extend to next year's high season and further into the future, as history suggests it should," said Executive Director Lincoln Moore.
"While lag effects stemming from the poor 2018 harvest continue to weigh on gross margins, we have managed to partially offset these by selling our produce at a premium to international prices. Together with our efforts to secure kernels from external sources for processing, shareholders can rest assured that we are working hard to counterbalance external factors that are beyond our control, including weak international CPO pricing," Moore added.
Shares in Dekeloil were up 3.9% at 4.00 pence on Wednesday.
