• According to the local press, Malaysia will meet up with Indonesia and Columbia in February 2019 to discuss France’s decision to exclude the use of palm oil as a feedstock for biodiesel. On 19 December 2018, the French National Assembly voted to end tax incentives for palm biodiesel in year 2020. As such, palm oil will be treated as regular fuel in France and not as a green fuel. A government official said that the MSPO (Malaysia Sustainable Palm Oil) certification will help address the anti-palm oil campaigns undertaken in EU countries.

• The Business Standard cited the Solvent Extractors Association (SEA) of India as saying that the reduction in import duties on Malaysia’s palm products in January 2019 would be a major blow for Indian farmers. SEA said that this would result in more edible oil coming to India from Malaysia, making it a dumping ground as Malaysia is currently sitting on a massive stockpile. Hence, the edible oil industry in India is urging the government to impose a nontariff barrier with quantitative restrictions and other measures to prevent dumping. Due to the Malaysia-India Comprehensive Cooperation Agreement signed in year 2010, India’s import duties on Malaysia’s CPO will be reduced from 44% to 40% and refined oil from 54% to 45% from 1 January 2019 onwards.

• Reuters reported that China plans to make a third round of US soybean purchases. More than two million tonnes of additional purchases are likely to take place before the Christmas holiday on 25 December. This would bring China’s total soybean purchases to more than five million tonnes in December 2018. In spite of this, US soybean prices have not received a boost. According to Reuters, traders are eyeing record US soybean stockpiles and a looming soybean harvest in Brazil in the coming weeks.

• Bloomberg reported that Indonesia has fined 11 companies for missing its B20 biodiesel mandate. Two fuel retailers including PT Pertamina and nine biodiesel producers will have to pay a total fine of 360bil rupiah (US$24.7mil). The companies either failed to mix their diesel with biodiesel or missed their delivery targets during the September to October 2018 period.

• Bloomberg also reported that China has admitted to excessive government subsidies for the production of corn, cotton, rapeseed and soybeans in the country. This is based on data submitted to the World Trade Organisation (WTO). China’s subsidies exceeded the WTO cap for soybeans from year 2012 to 2016, corn from 2013 to 2016 and cotton from 2011 to 2016. Between years 2011 and 2016, China provided subsidies to the farmers in excess of 8.5% of its WTO cap.

Source: AmInvest Research - 31 Dec 2018