• Bloomberg cited a government official as saying that China plans to reinvigorate its hog production and targets an increase in domestic pork supply to 80% of normal levels by the end of 2020F. The country’s hog breeding capacity is likely to reverse a decline and start recovering by the end of the year. Production at big farms has been recovering quickly as hog and breeding sow inventories have risen in October from September.

• According to Bloomberg also, Pertamina’s biodiesel usage amounted to 4.5mil KL (3.9mil tonnes) in 10M2019 vs. 3.9mil KL (3.4mil tonnes) for Indonesia in 2018. Pertamina has started B30 trials at two fuel terminals in Java. Pertamina will start trials in Kalimantan and Sumatra in December 2019.

• Reuters reported that Total has criticised the French Parliament’s decision on 15 November to remove tax breaks on palm biofuels, saying that the survival of its biorefinery plant in south of France is at stake. Total has invested about €300mil to convert the plant from a crude oil refinery to a biofuel plant. Total will produce biofuels without palm oil for the French market and export palm biofuel to countries like Germany and Belgium.

• ICIS said that US biodiesel production is likely to decline further if the lapsed US$1.00/gallon tax credit is not reinstated as part of the US government’s budget for the next fiscal year. Without the tax credit, the US biodiesel sector argued that the proposed increase in biodiesel volumes from 2.1bil gallons to 2.43bil gallons would not be enough to sustain the market. The volume of 2.43bil gallons is the volume that the EPA (Environmental Protection Agency) expects to maintain through year 2021F.

• Reuters cited a government minister as saying that Malaysia will enforce regulations to ensure that by year 2021F, its palm oil meets new food safety standards under consideration by the EU. The EU is considering setting new limits on food contaminants in refined fats and oils, and imposing a safety level for 3MCPD esters found in palm oil.

• Bloomberg reported that Argentine farmers are making a shift from corn to soybean due to the drought. The Buenos Aires Grain Exchange said that farmers are switching about 100,000ha of fields to soybean from corn due to the lack of rain. Currently, the USDA forecasts soybean production in Argentina to be 53mil tonnes for 2019E/2020F vs. 55.3mil tonnes in 2018/2019E.

• Reuters reported that the implementation of Indonesia’s B30 biodiesel plan would reduce the country’s fossil fuel consumption by 165,000 barrels per day. A government official said that the 9.6mil KL (8.4mil tonnes) of fatty acid methyl ester to be used in B30 in year 2020F is equivalent to 165,000 barrels per day. Also, the government will start preparing research for B30 after officially launching B30 in January 2020.

Source: AmInvest Research - 2 Dec 2019