• Bloomberg reported that China is rebuilding its state soybean reserves with overseas supplies after selling almost all of its stockpiles in past years. The government has sold more than six million tonnes of soybeans from the reserves since 2016. According to an industry expert, China has purchased about 10mil tonnes of US soybeans for the state reserves since last year.
   
• Singapore’s Straits Times reported that 10 major palm oil companies have teamed up to set up a new radar system to monitor forests in Malaysia and Indonesia more closely and speed up action to stop deforestation. The coalition of palm oil producers and buyers will contribute nearly US$1.3mil to the project – led by US-based World Resources Institute –which will keep watch on forests using data from the European Space Agency satellites. The system will use high resolution images instead of existing monitoring initiatives, cover a wider area and penetrate cloud cover.

• Singapore’s Straits Times quoted Indonesia’s Vice Foreign Minister Mahendra Siregar as saying that Jakarta is reviewing a draft trade deal with the EU in the run-up to filing a complaint against the EU with the WTO over the use of palm oil in biofuels. The Indonesian government will take a close look at the proposed text of Indonesia’s comprehensive economic agreement, currently under negotiations with the EU to make sure that palm oil is positioned “fairly”. Mahendra said that filing a complaint with the WTO is not an option but a must. Jakarta plans to file the complaint this month.

• The Star Online reported that more than 300 oil palm smallholders in Perak were awarded sustainability certification after months of hard work to comply with the requirements to be globally recognised as sustainable palm oil producers. About 335 independent smallholders, who voluntarily participated in the Wild Asia Group Scheme, became the first group of smallholders to receive both the MSPO and RSPO certification. Out of the 335, 58 farmers were the first Orang Asli independent smallholders. A government official said that as at endSeptember 2019, only 6% or 62,600ha out of 979,900ha of smallholders in Malaysia were MSPO-compliant.

• Reuters reported that Chinese commodities trader COFCO International is investing in its cane processing plants in Brazil to expand ethanol production as ethanol is expected to give better returns than sugar. COFCO is building new distillation columns and tanks at three of its four plants in Brazil to expand ethanol capacity. The investment indicates that COFCO does not see any significant improvement in sugar prices in the short term. According to a company official, Brazilian mills may start to favour sugar production over ethanol only when sugar prices reach about US$0.15/pound. Currently, raw sugar prices are about US$0.125/pound.

Source: AmInvest Research - 11 Nov 2019