• Bloomberg cited India’s Soybean Processors Association as saying that the government should not reduce import duties on palm oil. The association wrote a letter to the trade minister, requesting the government to retain import duties on crude palm oil, refined palm oil and palm olein. Import duties are supposed to be reduced by 4 percentage points to 40% for crude palm oil and 9 percentage points to 45% for refined palm oil and palm olein on 31 December 2018 pursuant to the Asean Free Trade Agreement and Comprehensive Economic Cooperation Agreement between India and Malaysia.

• Reuters quoted Oil World as saying that prices of palm oil and soybean oil may rise by US$50/tonne to US$100/tonne in the next nine months as palm stockpiles decline. Oil World said that CPO prices would trade between RM2,200/tonne and RM2,600/tonne in 1H2019. The organisation added that global palm inventory would peak in November or December 2018 before starting to fall in 2019F as output ease.

• According to Jakarta Post, Indonesian farmers have challenged claims that the palm oil industry has brought prosperity to smallholders and reduced poverty. The chairman of the Bogor-based Oil Palm Smallholders Union said that better welfare and sustainable development goals could be achieved if farmers are able to secure their land rights and if the government sets a minimum price for fresh fruit bunches (FFB). The chairman added that out of the 17 million in Indonesia, who depended on palm oil for their livelihood, three million are independent farmers that sell their FFB to middlemen at very low prices of Rp500/kg (US$0.03) or even less than that.

• Bloomberg reported that China reduced its soybean imports from the USA by 80% YoY in September 2018 as impact from the 25% tariff on US soybeans took its toll. On the other hand, China’s imports of soybeans from Brazil surged by 28% YoY to 7.59mil tonnes in September 2018. According to the China National Grain and Oils Information Centre, China’s soybean imports are expected to fall by 17% YoY to 20mil tonnes in 4Q2018 as the country continues to shun US soybeans.

• Reuters reported that Argentine soybean crushing factories are seeking to export soymeal to China for the first time. The Argentine government said that the pact is currently being ironed out and it hopes that the deal can be announced during the G20 summit in Argentina from 30 November to 1 December 2018. As for soybeans, Argentina is expected to export 16mil tonnes to China this season. If the US-China trade dispute is resolved, shipments to China would return to the normal level of seven million tonnes.

Source: AmInvest Research - 12 Nov 2018