• Bloomberg reported that China imported the most palm oil in more than six years in August 2019. The higher demand was driven by the drop in soybean imports resulting from the African swine fever disease and trade war with the USA. China’s palm imports amounted to 590,000 tonnes in August 2019, which was the highest monthly figure since December 2012. China’s palm imports climbed by 59% YoY to 3.42mil tonnes in 8M2019.

• Bloomberg also said that the Chinese government has given new tariff waivers to several state and private companies to buy US soybeans. The companies received waivers for two to three million tonnes of soybeans. Some firms had already bought at least 20 cargoes amounting to 1.2mil tonnes of soybeans from the US Pacific Northwest a week ago. Chinese companies, which received the tariff waivers, include state-owned COFCO and Sinograin.

• Jakarta Post reported that Indonesia will prioritise imports of buffalo meat, rice and raw sugar from India after India raised the import duty on refined palm products from Malaysia in early September 2019. Indonesia’s Trade Minister said that despite prioritising India as an import origin country, Indonesia will not increase the import volumes of meat, rice and sugar from the current levels. He added that within six months, Indonesia will export CPO worth at least US$500mil to India. Based on a CPO price of RM2,100/tonne or US$505/tonne, we estimate that the export value of US$500mil translates into export volumes of about 991,000 tonnes.

• The Star reported that the French government will help promote Malaysia’s sustainable palm oil products by providing scientific findings of the products to its people. FrenchSecretary of for Economy and Finance added that the French government’s decision to ban palm biodiesel is not targeted at palm oil but the use of diesel. She said that currently, the country is limiting the number of cars with diesel and some authorities are even banning diesel cars in cities.

• Bloomberg quoted James Fry of LMC International as saying that biodiesel output in Indonesia may rise to more than 8mil tonnes in 2020F from about 7mil tonnes in 2019E on the implementation of the B30 biodiesel policy. Also, Indonesia’s biodiesel exports will be limited in 2020F due to the EU’s anti-dumping duties. Malaysia’s biodiesel production is estimated to increase to more than 1.6mil tonnes in 2020F from 1.3mil tonnes in 2019E as the B10 biodiesel mandate will be extended to heavy vehicles.

• BBC reported that in spite of a 29% fall in the sugar content of drinks in the UK, average sugar content in food products in shops fell by just 2.9% from 2015 to 2018. Also, sales of soft drinks increased between 2015 and 2018 but shifted towards low or zero sugar versions. The amount of sugar in foods bought at supermarkets in the UK rose to 743,000 tonnes in 2018 from 723,000 tonnes in 2015 as portion sizes became bigger. In addition, there was an increase in the sale of ice creams and sorbets in 2018 possibly due to the hot weather. The sugar taxes of 24 pence/litre on drinks that contain 8 grams of sugar per 100mil and 18 pence/litre on drinks that contain 5–8 grams of sugar per 100ml, were imposed in the UK in April 2018.

Source: AmInvest Research - 30 Sept 2019