• Bloomberg reported that Indonesia has scrapped surveyor’s verification for some exports. The relaxed export requirements will apply to crude oil, coal and crude palm oil, amongst others. The move is expected to boost Indonesia’s exports. Also, a government official said that the Indonesian government will soon launch a regulation that will allow exporters of natural resources to get extended tax exemption even if they roll over their forex earnings from one local bank to another.

• Bloomberg cited a weather expert as saying that rains may arrive in Brazil in February, which will give the country’s soybean and corn fields a chance to improve crop yields and limit the widespread damage. For at least three weeks in February, above-normal rains are expected to keep crop failures at bay. Central and northern Brazil including Mato Grosso have received less than half of the normal rain levels in the past 60 days.

• Bloomberg also reported that China’s palm oil imports may increase this year. The China National Grain and Oils Information Center said that palm shipments may surge by 17% to a six-year high of 6.2mil tonnes in the 12 months ending 30 September 2019. The ongoing trade war with the USA and the spread of the swine disease that is affecting China’s hog supply are expected to reduce the country’s soybean imports.

• Physics World cited a UK study as saying that companies selling products, which contain palm oil should be upfront about where the palm oil comes from. The study found that UK consumers’ awareness of palm oil is high with 41% viewing palm oil as “environmentally unfriendly”. Only 5% of the consumers recognised the RSPO label. Out of that, only 1% said that they actively include products with the RSPO label in their shopping.

• A survey by Farm Futures reveals that US farmers may want to increase corn and cotton acreage while cutting back on crops affected by China’s imports tariffs such as soybean and sorghum. According to the survey, soybean planted areas in the USA may decline by 5.5% to 84.6mil acres in 2019F while planted areas of corn may increase by 1.3% to 90.3mil acres. If true, we believe that this would boost soybean prices. The USDA is expected to release the

Prospective Planting Report on 29 March 2019.

• Bloomberg reported that the European Union (EU) has recognised certified-sustainable US soybeans as feedstock for biofuel. This means that biofuel from the certified US soybeans can count towards the EU’s target that 10% of its transport fuel must come from renewable sources by year 2020F. However, the recognition is valid only until 31 July 2021 when the EU’s updated renewable energy rules take effect. The new EU biofuel rules in year 2021F are expected to be stricter. For example, biofuels from crops cultivated on clearedforest land will not be allowed.

Source: AmInvest Research - 4 Feb 2019