• The New Straits Times quoted the Primary Industries Minister Teresa Kok as saying that Malaysia has identified Saudi Arabia and Ethiopia as new markets to export palm oil. Efforts to promote Malaysian palm oil to both countries will take place soon pending visits by the ministry’s deputy minister. The minister also said that efforts to promote Malaysia’s palm oil will be assisted by other ministers during their visits abroad. Defence Minister Mohamad Sabu said he will discuss the matter with his counterparts in Russia and Iran when he attends meetings in both countries.

• Bloomberg reported that Indonesia will set up a team to act against the EU on its proposed ban on palm biodiesel. The government is consulting with five law firms currently. The team will partly comprise officials from several ministries.

• Bloomberg also cited Fitch Ratings as saying that the credit profiles of some Asian palm oil producers may be at risk due to limited re-rating headroom after weak performances in 2018. Some Fitch-rated palm oil players posted a decline in EBITDA and higher leverage in 2018 as they were hit by lower CPO prices and rising unit production costs. Palm producers monitored by Fitch recorded 20% YoY declines in EBITDA last year.

• According to Bloomberg also, Indonesia will be holding more road tests for 100% biodiesel to be used in motor vehicles. The Agriculture Ministry will use B100 biodiesel on 50 cars and heavy equipment. Cars that will be used include the Mitsubishi Pajero, Toyota Hilux and Innova. The ministry would like heavy equipment makers to make changes to their engines so that they will be able to use B100.

• Reuters reported that even with the ongoing trade war, China is still the top destination for US soybeans during the first half of the marketing year. Data published by the US Census Bureau showed that the US exported 4.58mil tonnes of soybeans in February 2019. China accounted for 46% of US’s soybean shipments in February. Non-Chinese buyers have been significantly slowing down purchases in recent weeks. Many non-China buyers loaded up US soybeans when they were cheap compared with their South American counterparts last year after the trade war broke out. But now, soybean prices in Argentina and Brazil are competitive.

• Bloomberg said that China is considering a US request to shift some tariffs on key agricultural goods to other products. The step would involve China moving retaliatory duties imposed on US$50bil worth of US goods to non-agricultural imports. Details of the nonagricultural imports were not disclosed. Apart from soybeans, China’s imports of US products include aircraft engines and semiconductorss.

Source: AmInvest Research - 29 Apr 2019