• Reuters reported that France’s parliament has voted to remove tax breaks for palm biofuel, a day after the previous ruling in favour of the tax break led to protests from environmentalists. The National Assembly, which is France’s lower house of parliament, had agreed to extend the tax break until 2026. But due to protests from environmentalist, members of parliament and the government agreed on a second vote. France’s 2019 Budget specified that palm oil would be removed from a list of permitted biofuels from January 2020 onwards.

• According to Reuters also, heavy rains in October and November have brought more misery to Indian farmers after summer crops such as soybeans suffered damages from the rains and floods during the wettest June-September monsoon in 25 years. Recent heavy rains in Maharashtra and Madhya Pradesh have forced the Solvent Extractors Association of India to cut its estimate of India’s soybean production to 9mil tonnes in 2019E vs. 10.3mil tonnes in 2018. Lower soybean production may lead to more imports of vegetable oils in 2019E/2020F.

• Bloomberg reported that Indiana-based Integrity Biofuels has become the 10th biodiesel plant in the US to close or cut back production this year. The move came amidst industry anxiety over the reauthorisation of the US$1.00/gallon biodiesel tax credit, which lapsed on 1 January 2018. John Whittington, the co-owner of Integrity Biofuels, said that no one knows for sure if the US biodiesel tax credit will come back or if it would be retroactive if it is reinstated.

• Bloomberg quoted SGS as saying that Malaysia’s palm shipments rose by 3.3% in the first 20 days of November compared with the same period in October. The rise in shipments was driven by the EU, which imported 21.3% more palm products from Malaysia. This mitigated the 23.8% fall in shipments to India and 26.2% decline in exports to China.

• Bloomberg cited data from the Solvent Extractors Association of India as showing that India’s palm imports declined MoM in October 2019 as traders and refiners curbed purchases after prices became more expensive. India’s imports of refined palm olein and crude palm oil fell by 11.2% to 766,822 tonnes in October from 863,847 tonnes in September. India’s inventory of edible oils at the ports and pipelines stood at 1.78mil tonnes as at 1 November 2019 compared with 1.8mil tonnes as at 1 October 2019 and 2.3mil tonnes as at 1 November 2018.

• Bloomberg quoted the Council of Palm Oil Producing Countries (CPOPC) as saying that the United Nations should create internationally recognised sustainability standards that apply across all agricultural crops including palm oil. Yusof Basiron, executive director of CPOPC, said that the standards should also apply to soya and European oilseeds to avoid bias that only some commodities have to meet sustainable certification. The move will also counter criticism that national certification standards in Malaysia and Indonesia such as the MSPO and ISPO are not internationally recognised.

Source: AmInvest Research - 25 Nov 2019