Dekel Agri-Vision Plc (LON:DKL), the West African agriculture company focused on building a portfolio of sustainable and diversified projects, has provided a September production update for its Ayenouan palm oil project in Côte d’Ivoire and an update on progress regarding the ramp-up of production of our large-scale cashew processing plant at Tiebissou, Côte d’Ivoire.

Key Highlights

·      Dekel achieved a 15.0% improvement in fresh fruit bunches (‘FFB’) processed compared to last month and a significant improvement in crude palm oil (‘CPO’) extraction rates at 21.3% compared to 19.4% last month.

·      However, CPO volumes remained low compared to September 2021 (36.3% lower), while CPO prices achieved continued at close to all-time highs (€1,030).

·      Dekel had a successful month in terms of final equipment installation and commissioning at the Cashew Operation, which means it is well on track to meet the Company’s 2023 objective of processing 10,000tn of raw cashew nuts (‘RCN’).

	Sep-22	Sep-21	Change
FFB processed (tonnes)	6,074	10,393	-41.6%
CPO Extraction Rate	21.3%	19.6%	8.7%
CPO production (tonnes)	1,296	2,035	-36.3%
CPO Sales (tonnes)	1,076	2,046	-47.4%
Average CPO price per tonne	€1,030	€954	8.0%
Palm Kernel Oil (‘PKO’) production (tonnes)	105	137	-23.4%
PKO Sales (tonnes)	53	Nil	n/a
Average PKO price per tonne	€1,176	n/a	n/a
Palm Kernel Cake (‘PKC’) production (tonnes)	Nil	241	n/a
PKC Sales (tonnes)	Nil	260	n/a
Average PKC price per tonne	n/a	€80	n/a

CPO Production

·      FFB quantities improved 15.0% compared to last month but were 41.6% lower than September 2021. In early October, volumes are showing further signs of improvement but they remain materially lower than this time last year when record volumes were achieved.

·      The CPO extraction rate achieved of 21.3% was an excellent result and close to a record for September, in addition to being 8.7% higher than September 2021 aiding profit margins.

CPO and PKO Price

·      Local CPO prices achieved of €1,030 were 8.0% higher than September 2021. International CPO prices fell below €1,000 for the first time this year in September largely due to macro conditions but have steadied in early October to remain around €1,000 per tonne. Importantly, there remains excellent local demand around the €950-1,000 price range.

·      PKO prices achieved continue to be significantly higher than average 2021 prices. Strong local and regional demand meant that local PKO prices in September traded at a slight premium to international prices.

CPO Sales

·      47.4% lower like-for-like CPO sales quantities in September reflect the reduction in CPO produced resulting from weak FFB volumes and our efforts to carefully manage sales volumes where appropriate to maximise pricing.

Cashew Operation

·      Further to the Company’s announcement of 12 September 2022, the production capacity of the Cashew Operation has materially increased and in October should reach 75% of the level required to process 10,000tn pa.

·      The colour sorter and shelling machines mentioned in the Company’s previous monthly operational updates are operating well following the completion of their delivery and commissioning. With the resultant material increase in throughput, the Company is now integrating the last two peeling machines which, when fully operational in the next few weeks, will complete the operational value chain.

·      As processing patterns continue to stabilise, we will begin sharing key statistical operational and production data as appropriate.

Lincoln Moore, Dekel Agri-Vision‘s Executive Director, said: “The Cashew Operation is now on track in terms of production capacity to reach the Company’s goal of processing 10,000 tonnes of RCN in 2023. Whilst CPO volumes remain below the record H2 2021 results, CPO volumes are showing signs of improvement and CPO extraction rates are relatively strong. CPO and PKO prices achieved remained close to all-time highs which is important as we edge closer to the next high season in early 2023.”