Lack of Indonesian sun adds to tea sector clouds

tải xuống (6) The cloudy weather that curbed palm oil production in parts of Indonesia has hurt tea plantations too, landing plantations group Sipef with a 20% slump in output.

The bananas-to-rubber group said that tea output for the first half of the year fell to 1.29m tonnes as persistent cloud cover reduced plants’ growth potential.

"The tea garden at Cibuni in Java-Indonesia was covered pratically the whole of the first semester by a thick layer of clouds," the Belgian-based group said.

"It’s only since June that we have registered an improvement."

Tea setbacks

Indonesian cloud – which left Sipef’s tea profits down more than one-half this year at $904,000 for the half year – is one of a series which has faced tea producers.

Sri Lanka, the third-ranked tea-producing country, on Thursday reported July output of 24.2m kilogrammes, an 11.5% slide year on year, and a fourth successive month of decline, blamed on poor weather.

Tea is an important earner of foreign currency for Sri Lanka, with exports hitting $1.4bn last year.

Meanwhile in Kenya, the top exporter of black tea, shipments fell 16% in the first half of the year, a decline blamed on hot and dry weather, despite the impact of political unrest in North Africa, a big tea-drinking area, in stemming import demand.

"The lack of rains over the tea-growing areas in Kenya kept prices during the second quarter in a tight range," Sipef said.

Palm improvement

The group added that some of its Indonesian palm estates had suffered lower production in the first half of the year too, with mature plantations in North Sumatra seeing a 6.0% decline.

However, "substantially better weather conditions" in other parts of the country, and in Papua New Guinea, coupled with the maturation of trees in many areas saw overall output rise 13.2% to 96,335 tonnes.

With palm oil prices also higher than a year before, the result drove a 38% rise to $177.1m in Sipef’s revenues for the first half, with earnings attributable to shareholders soaring 83% to $49.9m.

And, with palm oil prices set to be underpinned by its relative cheapness against other vegetable oils, the group said that its profit "will move towards a recurring result that should exceed that of 2010".

Nonetheless, with investors having already factored in a rise of one-quarter in earnings, to $83.5m, Sipef shares were little moved by the statement, adding 0.4% to E57.20 in Brussels.


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