Chronicle Editor
Business Reporter
LISTED agriculture company, Ariston Holdings Limited, says its tea export revenue dropped by average 22 percent in the first quarter of 2022 due to the adverse impact of Covid-19 on shipping logistics.
The ongoing Russia-Ukraine conflict is also having a negative impact on the speed and cost of logistics resulting in increased input costs, it said.
To date, Ariston said it has noted a significant increase in the cost of fertiliser, which is the group’s most significant single cost.
In a trading update for the period ending March 31, Ariston said despite a decline, demand started improving in early March.
“Tea production volumes had a marginal increase of 0.2 percent at 2,028 tonnes compared to 2,023 tonnes in the prior comparative period,” it said.
“Export tea sales volumes suffered a 22 percent decline to 511 tonnes, while the average selling price improved by eight percent against prior period.
“There was a slow uptake of export teas in the first quarter of the year due to the effects of the Covid-19 pandemic on shipping logistics and costs. However, demand started improving in early March 2022.”
Local tea sales volumes declined by 10 percent to 735 tonnes while the local tea average selling price increased by 21 percent.
With regards to macadamia, 36 percent of the projected annual crop had been produced at the end of the current half-year, compared to 32 percent in the prior period.
“As at half-year, macadamia production volumes were four percent above the prior comparative period. Export sales volumes were 47 percent ahead of the prior comparative period due to sale of some prior year macadamia stocks at the start of the current year,” said the company.
The macadamia nut-in-shell prices have been under pressure due to the effects of Covid-19-induced lockdowns in China.
This, it said, could be a temporary feature, which may reverse once China is back to full production.
Commenting on the weather pattern during the period under review, Ariston said the agricultural season was characterised by late rains, which only commenced in earnest in December 2021.
“Thereafter, the rains were erratic and in total all estates received less rain in this period than in the prior year’s comparative period,” it said.
“However, while the rains were late, the weather conditions were cooler than in the prior comparative period. The cooler temperatures resulted in a positive impact on quality of teas and better nut-set in macadamia.”
It said accordingly, production volumes and quality showed an improvement in the period under review.
“Crops under irrigation at Kent were unaffected by the late rains. Dryland planting at Kent Estate could only be completed in late December 2021 as a result of lower and delayed rainfall in the current period,” said Ariston.
On the outlook, the group projects higher yields than prior year, a softening in the export price of macadamia nuts but improvement in export tea price.
Online Reporter