• Reuters reported that protein content in Brazil’s soybeans fell for the first time in four harvests in 2018. Declining protein levels in Brazil spell trouble for exporters. They may face risk of cancellations, be forced to sell beans at a discount or be required to provide stricter contracts requiring quality assurances. Protein content in Brazil’s 2018 soybean crops slipped to 36.83% from 37.14% in the previous year. An industry player said that a Brazilian company had to turn down a potential sale to China a few weeks ago as it could not guarantee the minimum protein content required by the Chinese buyer.

• Bloomberg reported that China has called on its people to reduce their intake of edible oils, sugar and salt as part of a nationwide campaign to minimise health risks. China is targeting daily consumption of oils to be no higher than 25 to 30 grams per adult by year 2030 compared with the average intake of 42.1 grams in 2012. China is also targeting daily salt intake of less than 5 grams per person by 2030 from an average of 10.5 grams in 2012. A department director with the National Health Commission said that unreasonable dietary behaviour, especially increased intake of salt, edible oils and sugar are major factors hurting people’s health.

• The Straits Times of Singapore reported that Indonesia may halt all palm oil shipments to the European Union (EU). Indonesia is ready with countermeasures if the EU goes ahead with plans to restrict use of palm oil in biofuel. To mitigate the drop of exports to the EU, Indonesia is planning to increase the content of palm oil in its biodiesel going forward. Jakarta plans to raise the content of palm oil to B30 next year and B50 in later years from B20 currently.

• Bloomberg cited Archer Daniels Midlands (ADM) as saying that President Trump’s trade war with China will change the way China imports its soybeans in the future. China will try to reduce its dependence on the US by buying elsewhere and improving its own soybean yields. ADM’s CFO said that China is also carrying out land reform, which will consolidate farms into bigger structures and allow for more agronomical improvements. Also, there was a reason why China acquired Syngenta. Syngenta will bring the technology to improve soybean yields in China. Syngenta, which is based in Switzerland, produces agrochemicals and seeds.

• Reuters reported that US export data showed that China cancelled US soybean shipments in early July. This was the first time since April 2019. The amount of shipments that were cancelled was small at 9,853 tonnes. Industry experts said that China’s need for soybeans has cooled due to the African swine fever disease.

• Reuters quoted the RSPO as saying that protected forest areas will grow by up to 10% under new rules to stop deforestation. Last year, the RSPO introduced stricter rules, which included a ban on cutting down forests or converting peatlands into oil palm plantations. Since 2015, the RSPO has been working on pilot projects in Malaysia, Indonesia and Ecuador to help authorities promote sustainable palm oil. The RSPO has also linked up with Britain’s Chester Zoo to raise awareness on sustainable palm oil, which led to the city being named as “Sustainable Palm Oil City” early this year.

Source: AmInvest Research - 29 Jul 2019