• Reuters reported that environmental activists abseiled down storage tanks and unfurled banners at a palm oil refinery in northern Sulawesi to protest against deforestation. The activists draped banners saying “drop dirty palm oil now” while others clung to the anchor of a cargo ship near the refinery operated by Wilmar International. A spokesman said that the refinery’s operations were unaffected. The activists were mainly from Greenpeace. Wilmar described Greenpeace’s actions as a “criminal act of trespassing and vandalism” that posed safety risks to the activists and Wilmar’s staff.

• According to The Star, Dorab Mistry has forecast Malaysia’s palm oil inventory to reach 3.0mil to 3.3mil tonnes by end-December 2018. This is in spite of his projection that Malaysia’s CPO production would decline from 19.97mil tonnes in 2018 to 19.2 to 19.5mil tonnes in 2019F. Mistry said that Indonesia’s palm inventory is close to 5mil tonnes currently and will keep rising gradually every month. Palm inventory in Malaysia stood at 2.49mil tonnes as at end-August 2018. Mistry added that CPO price needs to fall to RM2,100/tonne to regain competitiveness.

• According to Bloomberg, Oil World has forecast CPO production in Indonesia to increase by 4% from 39.4mil tonnes in 2018E to 41mil tonnes in 2019F. This is slower than the 7% rise in CPO output in 2018E. Also, Oil World has estimated CPO output in Malaysia to inch up by 3.5% from 19.6mil tonnes in 2018E to 20.3mil tonnes in 2019F. Oil World has forecast CPO production in Malaysia to fall by 1.6% from 19.92mil tonnes in 2017 to 19.6mil tonnes in 2018E. Oil World reckons that CPO prices would bottom at RM2,100/tonne.

• Reuters reported that Taiwanese trade officials and business leaders have signed a letter of intent to purchase as much as 3.9mil tonnes of soybeans from farmers in Minnesota and Iowa in the US over the next two years. The Taiwanese Agricultural Trade Goodwill delegation said that it plans to purchase between 3.2mil and 3.9mil tonnes of soybeans valued at up to US$1.56bil in 2018 and 2019. In 2017, Taiwan’s soybean imports from the USA were 1.4mil tonnes. The deal comes as China’s buyers are shunning US soybeans due to the 25% import tariff.

• According to Nikkei Asian Review, the US-China trade war has the changed global flow of soybeans. American soybean exports to China have declined since July 2018 while exports to the EU, Asia and Oceania countries have increased significantly. US soybean exports to the EU jumped about 190% to 1.08mil tonnes in August 2018 while exports to Asia and Oceania grew by 60% to about 1.56mil tonnes. Meanwhile, China’s shift to Brazilian soybeans has triggered competition with the EU importers, which has resulted in higher prices. The premium of Brazilian soybeans over US soybeans has risen threefold from a year ago to US$2.70/bushel in July.

• SGS said that Malaysia’s palm shipments surged by 54.6% MoM in September 2018. The strong growth was driven mainly by a 39.1% increase in exports to India and 100.9% rise in shipments to the EU. These helped compensate for a 24.4% decline in exports to Pakistan.

Source: AmInvest Research - 8 Oct 2018