- Palm oil prices reached a record high of almost $2,000 per ton in March.
- MP Evans increased selling prices by 43% in the first half.
- Palm oil is found in almost half of all packaged foods in the UK, according to WWF.
Rising palm oil prices helped UK-listed producer MP Evans record record profits in the first half of the year.
But as palm oil is used in a huge range of products, from margarine to soap and shampoo, rising prices bring even more bad news for consumers.
MP Evans, a producer with plantations in Indonesia, said it was selling palm oil at $1,035 a ton in the six months to June 30, up 43% from $724 in the first half of 2021.
Rising prices: Palm oil prices hit a record high of nearly $2,000 a tonne in March
Crude palm oil prices have hit historic highs in recent months as the war in Ukraine sent prices for all vegetable oils soaring amid fears of a global shortage.
Average palm oil prices, including transportation and insurance, hit a record high of nearly $2,000 a ton in early March, shortly after Russia’s invasion of Ukraine.
But prices had already risen to nearly $1,500 before the war due to production problems in Malaysia, which, together with Indonesia, is the world’s largest producer of palm oil.
Rising palm oil prices are likely to eventually drive up the prices of many items in supermarkets. WWF estimates that almost half of all packaged foods in the UK contain vegetable oil.
However, current market conditions are good news for MP Evans shareholders, who expect a 25% increase in dividend payments.
The company said that while production costs increased due to bad weather and higher fertilizer costs, they were offset by rising prices, resulting in higher margins.
He added that the “sales environment” was further complicated by the Indonesian government’s imposition of a temporary ban on palm oil exports in April and May.
Palm oil is used in a huge range of products, including Flora margarine.
Despite this, it managed to increase revenue by a third to $170.3 million in the first half of the year.
Operating profit rose 49% to $61.7 million, while gross profit rose more than 50% to a “record” $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 in dividends to shareholders this year and launched a share buyback program in June 2022.
Chairman Peter Hadsley-Chaplin said: “The Group delivered excellent results in the first half of 2022, helped by strong CPO prices, but once again demonstrating the benefits of the Group’s commitment to long-term responsible management and development. their estates.
“We are pleased to propose an increase in interim dividend to 12.5p per share in line with our progressive dividend policy.”
Palm oil producers are known for destroying rainforests and killing orangutans, although MP Evans prides himself on sustainable production.
MP Evans shares, listed on AIM, rose 0.7% to 818 pence in Monday morning trading. They are about 4 percent higher than a year ago.
Credit: www.dailymail.co.uk /