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Palm oil producer MP Evans has seen its mill gate prices jump 51% in 2022 amid supply constraints and commodity inflation, while palm kernals are up 85%.

Ahead of its AGM today the Indonesian palm palm oil producer said the average price of palm oil in the first five months of the year was US$1,630 per tonne, 45% higher than the US$1,127 per tonne during the equivalent period in 2021.

As well as wider disruption caused by the war in Ukraine, sales of CPO across Indonesia were temporarily disrupted due to the export ban introduced by the Indonesian government at the end of April 2022.

However, MP Evans was able to continue harvesting and producing at all operational locations and the ban was lifted by the government with effect from 23 May 2022.

In the period to the end of May 2022, the Group realised an average price at mill gate of US$1,079 per tonne compared with US$715 per tonne in 2021, an increase of 51%.

Prices for palm kernels also strengthened significantly, averaging US$899 per tonne (mill gate), 85% higher than the US$487 per tonne in 2021.

The crop of fresh fruit bunches for the five months ended 31 May 2022 was 342,200 tonnes from estates controlled by the Group, almost exactly the same as the 342,100 tonnes recorded for the same period in 2021.

Crops from the group’s associated scheme smallholders were 100,900 tonnes, again almost exactly the same as the 100,800 achieved in the same period in 2021.

Crops from group-controlled areas and scheme-smallholder areas had increased from the same period in the previous year by 24% and 43% respectively as harvests had improved significantly, particularly at Bangka and Kota Bangun.

The Group produced the equivalent of 130,300 tonnes of crude palm oil during the first five months of 2022, including 114,600 tonnes processed through its own mills with the balance being the oil content of ffb sold by the group to third-party mills.

These figures are similar to the 132,400 tonnes of CPO produced in the first five months of 2021, but the production from the group’s own mills has increased by 9% from 2021 as its new mill at Bumi Mas was operational throughout the period.

Meanwhile, an increased total dividend of 35p per share has been proposed in respect of 2021, and it remains the board’s intention to continue the group’s long-term trend of at least maintaining, or increasing, dividends for shareholders.

Morning update

Agri-services group Origin Enterprises has posted strong performance in its “seasonally important third quarter” ended 30 April 2022.

Reported Group revenue was €880.6 million for Q3, an increase of 47.3% on the prior year (44.2% on a constant currency basis).

While exceptional price volatility for both agricultural outputs and fertiliser persisted through the quarter, the group experienced strong trading conditions throughout the period with good crop establishment, generally favourable weather conditions and strong on-farm sentiment.

Group revenue for the nine-months ended 30 April 2022 was up 50.2% to €1.76bn on a reported basis (an increase of 46.2% on a constant currency basis).

Excluding crop marketing, revenue in its agronomy and inputs businesses delivered constant currency growth of 49.6%, reflecting volume growth of 2.3%, pricing improvement of 47.5% and a reduction of 0.2% reflecting the impact of acquisitions and disposals.

The group saw strong crop protection and seed volume growth, offset by fertiliser demand reduction as a result of the exceptionally high fertiliser pricing environment.

Ireland and the UK recorded an overall reduction in underlying volumes in Q3 of 8.7% and an increase year-to-date of 0.4%.

Q3 saw encouraging volume performances across the group’s seed and crop protection portfolios, offset by reduced fertiliser volumes.

In Continental Europe, the strong first half performance as a result of early season demand saw Q3 moderate to a 6.1% increase in reported revenue to €201.8m, resulting in a 22.9% increase year to date to €383.9m.

Continental Europe recorded an underlying volume decrease, excluding crop marketing volumes, of 9.7% in Q3 and an increase of 1.4% year-to-date.

Notably, in Ukraine activity levels reduced sharply since the start of the war with the limited sale of last year’s crop significantly impacting on-farm liquidity.

Looking forwards, the group said it has continued to successfully navigate price volatility and supply chain disruptions across its markets, primarily resulting from the war in Ukraine and ongoing global energy, commodity and general inflationary pressures.

“The strong trading conditions experienced to date have continued into Q4 across all three segments,” it stated.

The Group now expects to deliver increased growth in earnings year-on-year, with full year adjusted fully diluted earnings per share in the range of 64 to 68 cent for the full year.

On the markets this morning, the FTSE 100 is down another 1% to 7,401.8pts.

Risers include Just Eat, up 3.8% to 1,803.4p, McBride, up 3.7% to 31.1p and Sainsbury’s, up 1% to 211.5p.

Fallers include FeverTree, down 2.5% to 1,467.1p, Coca-Cola HBC, down 2% to 1,739.5p and SSP Group, down 2% to 248p. 

Yesterday in the City

The FTSE 100 fell back 1.4% yesterday to 7,476.2pts for its third consecutive day of losses.

Fallers included tech-focussed stocks such as Just Eat, down 6.3% to 1,737.2p, THG, down 5.9% to 130.7p, Naked Wines, down 4.1% to 343.2p and Ocado, down 3.9% to 915.4p.

Other fallers included Greggs, down 3.9% to 2,070p, Deliveroo, down 3% to 95.9p, Tesco, down 2.9% to 252.2p, Marks & Spencer, down 2.8% to 144.1p, Associated British Foods, down 2.5% to 1,652p, Pets at Home, down 2.4% to 323.6p and SSP Group, down 2.1% to 253p.

Risers included Tate & Lyle, which rose 2.3% to 762p after posting double digit annual sales and profit growth from continuing operations.

Other risers included Britvic, up 1.9% to 814.5p, Glanbia, up 1.7% to €10.74, Nichols, up 1.6% 1,250p, Coca-Cola Europacific Partners, up 1.5% to €50.60, McBride, up 1.4% to 30p and Premier Foods, up 1.2% to 120p.