Comvita shares rise after CEO downplays myrtle rust risk to manuka honey industry
By Paul McBeth
June 27 (BusinessDesk) - Comvita shares rose to a two-week high after the honey health products maker downplayed the risk posed to the manuka honey industry by the Myrtle Rust fungal disease.
The shares gained 3.6 percent to $5.70 after Te Puke-based Comvita said Myrtle Rust's risk to the wider industry was low, based on its analysis on Australian outbreaks of the disease.
"Neither our Australian JV partner Capilano or apiary businesses in Tasmania, with whom we have been speaking, have had any reports of myrtle rust being found in Leptospermum species since the fungus was discovered in mainland Australia in 2010 and Tasmania in 2015," chief executive Scott Coulter said in a statement. "There has been no impact from myrtle rust on their honey production."
Comvita's shares took a double whammy from the outbreak, which coincided with a poor honey harvest and aggressive competition through China's informal online trading channels which weighed on earnings.
Coulter said the New Zealand discovery of Myrtle Rust was consistent with Australia's experience so far and that the fungal disease hadn't been found on wild manuka plants, only in plant nurseries and domestic environments.
Still, Comvita is still treading carefully with procedures to identify and report the disease, regular inspections of its nursery stock, and a treatment regime for plants before they're moved from nurseries. The company is also investigating ways to breed plants resistant to the disease and what it can learn from Australia's outbreak.