- Palm oil prices hit a record high of nearly $2,000 a tonne in March
- MP Evans increased its selling prices by 43% in the first half
- WWF said palm oil is found in nearly half of all packaged products in the UK
Rise in palm oil prices has helped UK-listed producers MP Evans Record profit in first half.
But since palm oil is used in a vast array of products from margarine to soap and shampoo, rising prices signal more bad news for consumers.
MP Evans, a producer of plantations in Indonesia, said it sold palm oil for the six months to June 30 at $1,035 a tonne – a 43 percent increase from $724 in the first half of 2021.
Rising prices: Palm oil prices hit a record high of around $2,000 a tonne in March
Crude palm oil prices hit historic highs in recent months as the war in Ukraine sent prices of all vegetable oils skyrocketing amid concerns over global shortages.
Average palm oil prices, including transportation and insurance, hit a record high of about $2,000 a tonne in early March, shortly after Russia’s invasion of Ukraine.
But production problems in Malaysia had pushed prices up to about $1,500 before the war, which together with Indonesia is the world’s top producer of palm oil.
A rise in palm oil prices will eventually lead to higher prices for many items in supermarkets. WWF estimates that vegetable oil is found in about half of packaged products in the UK.
However, the current market conditions are good news for MP Evans shareholders, who are poised for a 25 percent hike in dividend payouts.
The company said that though the cost of production has increased due to inclement weather and higher cost of fertilisers, it has become higher due to increase in prices, leading to increase in margins.
It said the “sales environment” was further complicated by the Indonesian government’s temporary ban on palm oil exports in April and May.
Palm oil is used in a vast range of products including Flora Margarine
Despite this, it managed to increase revenue by a third to $170.3 million in the first half.
Operating profit rose 49 percent to $61.7 million, while gross profit rose more than 50 percent to $64.8 million.
In light of the strong performance, the group increased its interim dividend from 10p to 12.5p.
MP Evans has already returned $22.1 million to shareholders in the form of dividends this year, with more rewards coming as it launched its share buyback program in June 2022.
Chairman Peter Hadsley-Chaplin said: ‘The Group has delivered an excellent set of results for the first half of 2022, supported by a high CPO value environment, but once again by the Group’s commitment to long-term responsible management and growth. Demonstrates benefits. of its estates.
‘We are pleased to propose an increase of 12.5p per share in the interim dividend in line with our progressive dividend policy.’
Palm oil producers have a reputation for destroying rainforests and killing orangutans, although MP Evans prides itself on sustainable production.
mp evans share, which are listed on AIM, rose 0.7 per cent to 818p in morning trade on Monday. They are up about 4 percent from a year ago.
Credit: www.dailymail.co.uk /