• According to the Malay Mail, the Malaysian government has allocated RM500mil of loans to smallholders for replanting of oil palm. The loans will be given to individuals or smallholders at an interest rate of 2% per annum. The government will also grant loans of RM50mil so that smallholders can pay for raw materials and purchase of certified and high-quality seedlings. In addition, the government has allocated loans of RM100mil to assist smallholders in their MSPO certification.

• Bloomberg reported that purchases of farm equipment in the US have plunged by an annualised US$900mil in 1Q2019, which is the sharpest drop in three years. An official from the Association of Equipment Manufacturers said that member companies have already dismissed workers and deferred capital investment plans because of the US’ trade war with China. The association added that the retaliatory tariffs that China has levied on almost all of US agricultural products have hurt farmers, depressed commodity prices and have had a chilling effect on equipment manufacturers.

• Bloomberg also reported that Brazil’s soybean growers group and government officials plan to travel to the US to assess if Brazil should allow the use of Bayer AG’s weedkillers and resistant seeds. There are concerns after some American growers sued Bayer over the dicamba pesticide. Bayer has been battling lawsuits across the US Midwest after US farmers alleged that the dicamba-based herbicide vaporised and drifted into nearby fields, damaging crops that were not resistant. In Brazil, two dicamba-based herbicides are approved for use.

• Bloomberg quoted the Malaysian Reserve as saying that FGV Holdings is looking to cut as many as 6,000 jobs in 2019. The lay-offs will affect 20,000 workers at FGV’s headquarters in KL and regional offices. About 667 employees accepted FGV’s mandatory separation scheme in 2018. By June 2019, another 5,000 jobs will be cut.

• Jakarta Post cited the Indonesia Oil Palm Labor Union as saying that the EU’s plan to prohibit CPO as a raw material for biodiesel will affect about 16 million people including smallholders and labourers. An official said that about 3.78 million people worked in oil palm plantations. Many other people are involved in the supply chains and other industries, which use palm oil as feedstock.

Source: AmInvest Research - 6 May 2019