• Mongabay reported that a court in Indonesia has ordered PT Arjuna Utama Sawit to pay the equivalent of US$18.6mil in fines and damages for fires on its land in Kalimantan in 2015.The fires razed 970ha of forest in Central Kalimantan. The Indonesian Ministry of Environment and Forestry sued PT Arjuna Utama Sawit at the court in Palangkaraya, Central Kalimantan.
  
  The environment ministry’s director-general of law enforcement praised the court’s use of the concept of strict liability under which
  concession holders are responsible for any fire that occur on their land, regardless of whether they are proven to have started the fires.
   
• According to Bloomberg, Russia’s Uralkali has become the first global potash miner to sign supply agreements with India for 2020F at a price that may be encouraging for fertiliser makers. Uralkali has agreed to deliver potash to Indian Potash Ltd between October 2019 and 31 March 2020. Sources said that the price was set at US$208/tonne, which is US$10/tonne below the rate for China and India in 2019. The price that India and China has agreed with a producer, is used in contracts with other fertiliser suppliers.
   
• Bloomberg also reported that the Indonesian government has ordered the governors of the country’s provinces to increase the minimum wage by 8.5% for 2020F, which is roughly in line with the hike in 2019. The increase is pegged to a projected inflation rate of 3.39% of economic growth of 5.12%, according to Indonesia’s Minister of Manpower Ida Fauziyah. We believe that the hike in minimum wage in the various provinces in Indonesia was 8.0% to 8.1% in 2019.

• Financial Times reported that China is likely to miss a deadline for enforcing the mandatory use of ethanol petrol nationwide by 2020F after a backlash from energy firms, and local governments thwarted Beijing’s efforts to clean up the environment. Two years after Beijing unveiled its plan for compulsory use of E10 (10% ethanol in petrol), just three provinces and the northern city of Tianjin have hit the target. The policy failure has weighed on thedomestic price of corn. The low ethanol output partly reflects the high cost of production in China. The Singapore-based Asian Clean Fuels Association estimates that it would cost almost US$43bil to upgrade the refineries and petrol stations if E10 is fully implemented.

• Reuters reported that Italy’s 2020 Budget will include new taxes on plastic and sugary drinks designed to raise €1.3bil. The plastic tax rides a wave of international action against pollution and is intended to raise almost €1bil. The plastic tax entails firms to pay €1/kg of plastic produced. The sugar tax will affect non-alcoholic beer, fizzy drinks and fruit juices with added sugar or sweeteners. Both levies will take effect from 1 July 2020 onwards.

Source: AmInvest Research - 4 Nov 2019