• Bloomberg reported that state stockpile China’s Sinograin sold a total of 132.7mil tonnes of grains, edible oils and cotton from the state reserves in 2018. Sinograin’s president said that the destocking programme for state reserves of cotton, soybeans and rapeseed oil ended at the end of 2018. Sinograin sold 100.1mil tonnes of corn, two million tonnes of soybeans and 17mil tonnes of rice from the state reserves last year. Going forward, China will be maintaining its stockpiling programme for rice and wheat while stockpiling for other crops will be abolished.

• Reuters reported that French commodities trader Louis Dreyfus Co has risen to third place in the rankings for Brazil’s biggest soybean exporters in 2018. Louis Dreyfus shares the third place ranking with China’s COFCO. Bunge Ltd topped the ranking last year while Cargill Inc was the second largest exporter of soybeans in Brazil. Brazil exported a record 84mil tonnes of soybeans last year with most of the soybeans going to China. An industry player said that increased competition between trading houses benefits soybean growers as it brings liquidity to the market.

• CNBC quoted ClipperData, a tanker-tracking firm, as saying that China’s soybean imports in the opening weeks of 2019 have plunged compared with previous years. Soybean shipments offloaded in China so far this year have declined by 37% compared with the first two weeks of 2018. In addition to the ongoing US-China trade war, there is an outbreak of the African swine flu in China, which could crimp China’s demand for soybean meal going forward. China’s weak soybean imports could add to the evidence that the country’s economy is slowing down.

• Channel News Asia reported that a scheme to replant about a fifth of Indonesia’s oil palm areas is running behind schedule, marking a blow to efforts to improve FFB yields and fend of attacks on the sustainability of the crop.

• The target is to replant about 2.4mil hectares of oil palm owned by smallholders, with quality seedlings by year 2025. Indonesia’s president launched the scheme in late 2017. However, funding to replant only an area of less than 15,000 hectares was disbursed in November 2018. Initially, the Indonesia government provided subsidies of US$1,722/ha and required farmers to secure bank loans for additional financing. However now, the government has removed the requirement for bank loans. About 26 plantation companies have enlisted in the replanting scheme to help smallholders improve farm management.

Source: AmInvest Research - 28 Jan 2019