Select Harvest sees demand for almonds strong across the globe

Almond producer Select Harvest is having to combat high water prices and other input costs.

Harvesting almonds at one of Select Harvest's plantations.

Almond producer Select Harvest has maintained the size of its crop but reported a dip in profit as the company combats high water prices and other input costs.

Despite water costs soaring close to $1000 a megalitre, managing director Paul Thompson said the company was being smarter with its use of water and fertiliser to maintain yields.

“We’re not precision farmers, but we have got closer to that,” Mr Thompson said.

“We are applying water more at the right time and fertiliser to drive yields.”

The company is forecasting a 2020 crop of 22,600 mega tonnes, relatively unchanged from the prior corresponding period.

It reported a 13.4 per cent fall in net profit to $17.4m in the six months to March 31, while revenue fell 6.5 per cent to $93.5m.

Mr Thompson said demand for almonds remained strong across the globe, with Australian exports increasing 25.7 per cent in the past year. Although the COVID-19 pandemic had disrupted shipping programs.

Nevertheless, he said the company had sold about 70 per cent of its estimated crop.

“The recently announced estimate of a record almond crop grown in near ideal conditions in the US, to be harvested in August 2020, has contributed to prices softening.

“We now estimate that we will achieve a price of $8.20/kg for the 2020 crop.”

Mr Thompson said China remained a key market, along with India and the Middle East. He was diplomatic about the trade tensions between China and Australia, which has seen China impose punitive 80 per cent tariffs on Australian barley and suspend exports from four Queensland abattoirs after Prime Minister Scott Morrison spearheaded a push for an inquiry into the origins of coronavirus.

“All we can do is make sure the product arrives in good condition and the paperwork is right.

“The government has done a great job with all the free trade agreements in China, South Korea, Japan and Indonesia.”

Select will pay an interim dividend of 9c a share, compared to 12c a share in the prior corresponding period, on August 3.