• Bloomberg cited an official with the Malaysian Biodiesel Association as saying that Malaysia’s palm biofuel production may surge to 1.8mil to 1.9mil tonnes in 2020F from 1.3mil tonnes in 2019 as the country ramps up domestic biodiesel mandates. Biodiesel exports may drop to about 450,000 to 500,000 tonnes this year from about 580,000 tonnes in 2019. The EU will be Malaysia’s biggest export destination. If the EU-delegated act comes into effect, there will be zero biofuel shipments to the EU from 2024F onwards.

• Reuters quoted an official with Sime Darby Plantation as saying that the group could export more crude palm oil and divert refined oil to other markets after India placed curbs on refined palm imports. Mohd Haris, managing director of Sime Darby Oils said that the group has yet to see the impact of India’s recent decision on its export volumes to India. We estimate that 10% to 20% of Sime Darby Plantation’s revenue come from India.

• According to Reuters also, India’s trade minister will not meet his Malaysian counterpart in Davos because of his tight schedule. Previously, a Malaysian government spokesman said that trade ministers from India and Malaysia could meet on the sidelines of the World Economic Forum in Davos to discuss India’s curbs on refined palm oil. The official from India said that no meeting was planned between India’s Piyush Goyal and Malaysia’s Darell Leiking.

• Hellenic Shipping News cited a USDA report as saying that Argentina farmers increased the forward selling of soybeans in the last four months of 2019 to avoid higher export taxes that are now in effect. Figures released by the Argentine Ministry of Agriculture showed that as of 18 December 2019, exporters had registered 5.52mil tonnes of forward sales for the delivery of the 2019/2020 crop. In comparison, exporters had only registered 588,000 tonnes of forward sales for the 2018/2019 crop at the same time in December 2018.

• ICIS reported that the global muriate of potash (MOP) fertiliser market is showing signs of recovery after a lacklustre fourth quarter and slow festive season. The rebound is particularly notable in South Asia where India’s Rashtriya Chemicals and Fertilizers (RCF) had awarded a 105,000 tonne MOP tender to Belarusian Potash Company. The sale is understood to have been agreed at the established market Indian benchmark of US$280/tonne (including freight). Demand is also showing a slight uptick in South East Asia, where plantation owners are keeping an eye on the resurgent CPO futures market.

• In the long-term, many players are waiting for the start of China’s 2020F/2021F import contract talks, which will define the offer pricing for the rest of Asia. Chinese potash inventories are high and it is likely that Chinese buyers will push for a decrease on the outgoing 2019 agreement of US$290/tonne.

Source: AmInvest Research - 28 Jan 2020