Covid-19 negatively impacts ARISTON’s export earnings

Global pandemic, Covid-19, which broke out in China late last year before spreading all over the world has negatively impacted listed agro-concern ARISTON Holdings Limited’s export earnings.

The company is engaged in farming operations, which include tea, macadamia nuts, horticulture, deciduous fruits, fishery and poultry.

Most airlines remain grounded following the suspension of international travel and closure of borders by governments across the globe as part of measures to curb the spread of coronavirus.

“Export tea sales are subdued as the movement of tea samples is affected by airlines since demand for travel plummeted,” said the company’s chairman, Crispen Jongwe, in a statement accompanying the group’s reviewed financial results for the half year ended 31 March 2020.

“This is expected to result in 20% reduction in overall tea sales. Reduction in global tea demand has resulted in a 10% reduction in selling prices.”

Jongwe said tea harvesting had slowed down due to decline in head count as a result of implementation of social distancing rules.

“Pome fruit exports have been negatively affected by suspension of airline services, hence 1,580 tonnes will have to be locally consumed,” bemoaned Jongwe.

“Thirty percent of local pome fruit sales are made through the vendor market and since vendors are generally unable to operate during lockdown, there has been a decline in demand. During the lockdown, delays in processing payments by local bankers constrained the business. Supply chain disruptions are being encountered as South Africa remains largely on lockdown.”

However, the harvesting of macadamia fruit and other horticultural products, Jongwe said was unaffected with adequate labour for the operations existing on the estates.

“Macadamia export sales remain firm as orders are on hand for the entire current season crop,” he explained.

“Due to the cyclical nature of our agricultural model, the majority of our harvesting and selling activities occur in the second half of the year. Export prices for macadamia are expected to remain stable at current levels.  Export tea demand and pricing will continue to be under pressure for the remainder of this year due to global oversupply and effects of COVID-19.”

Jongwe added: “Exports of avocado and pome fruit are expected to be better than the prior year. Production volumes of other crops grown for local consumption, which include commercial maize, seed maize, seed sugar beans, soya beans, avocados, bananas and potatoes are expected to exceed prior year yields. The group’s financial performance for the year is expected to be in line with prior year.”

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