Palm Oil

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Dekel Agri-Vision has reported a softening of palm oil prices as it delivered another “strong” month of soaring production.

The London-listed West African agriculture group said fresh fruit bunch (FFB) volumes and crude palm oil (CPO) production increased by “a substantial” 163.9% and 144.9% respectively last month compared with May 2022.

It was a record for the month of May in terms of the CPO production result and a continuation of the later-than-usual high season, which is expected to lead to the palm oil operation delivering a materially higher half-year production performance in 2023 compared to 2022.

CPO sales quantities increased 17.8% in May compared wiht last year and palm kernel oil (PKO) production increased 93.9% compared to May last year. The recent spike in production has seen inventory levels of CPO and PKO at levels materially higher than last year, which was expected to drive strong sales quantities over the coming months.

The CPO sales price achieved remained strong at €953 per tonne, a slight decrease from last month reflecting the recent softening of international CPO prices, which are now trading around €800-850 per tonne. A local CPO price premium continued to be achieved, but further softening of local prices is expected in the coming months, although remaining well above historical averages.

Dekel executive director Lincoln Moore said: “May 2023 was a really pleasing month for the palm oil operation headlined by a 144.9% increase in CPO production compared to May last year, which was also a record level of production for the month of May.

“Whilst CPO prices have softened from near record levels, the current prices remain historically strong and we continue to achieve a local premium to international prices. Overall, the palm oil operation remains well positioned to deliver an excellent H1 2023 outcome.”

Morning update

It is a quiet start to the week for the City as a heatwave continues.

The FTSE 100 opened 0.3% higher at 7,587.30pts.

Early risers include Ocado, up 6.8% to 413p, THG, up 2.6% to 63.5p, and AG Barr, up 2.2% to 507.9p.

Fallers so far include HelloFresh, down 2.3% to €18.09, Kerry Group, down 1.8% to €90.20, and Science in Sport, down 1.7% to 14p.

This week in the City

It is also looking like a quiet week for scheduled fmcg updates.

The main news for the grocery industry will come on Friday as Tesco holds its AGM and updates the City on its Q1 performance.