• Bloomberg reported that Wilmar International has two plants in two locations in Wuhan, which remained closed during the Chinese New Year. Wilmar does not expect any significant impact from the virus outbreak in Wuhan, to its operations. The group has sufficient inventory to meet normal demand. Wilmar is waiting for instructions from the Chinese government on when it can resume operations. Golden Agri Resources said that its office in Shanghai and operations in Ningbo will be closed until 9 February 2020. The group will take appropriate action to minimise disruption to its businesses.
• Bloomberg said that although Brazil’s soybean harvest may be off to a slow start, there are no signs that exports are easing. An industry expert said that the demand for Brazil’s soybeans is so hot that vessels are selected even before the soybeans are harvested from the fields. Crop harvesting has been delayed by later-than-usual plantings. Forward sales are another indication that US exporters will have limited room to boost exports to China in the coming months. Brazilian farmers sold 43% or about 53mil tonnes of their 2019/2020F crops as of 10 January 2020 encouraged by favourable exchange rates and high premiums.

• Reuters reported that India’s monthly palm oil imports from Malaysia could fall to the lowest level in nearly nine years in January 2020 as traders stopped buying following informal instructions from the government. Some traders had been hoping that state-run trading firms could buy refined palm oil for the public distribution system by floating tenders but this did not materialise. A trader said that no one is buying Malaysia’s crude palm oil or palm olein for delivery in February. As such in February 2020, India’s imports of Malaysia’s products could be negligible at less than 10,000 tonnes as almost every Indian buyer has switched to Indonesia. Indonesian sellers are currently charging a premium of US$25/tonne over CPO from Malaysia.

• Economic Times of India reported that the Solvent Extractors Association (SEA) of India had urged the government not to allow imports of palm products at zero duties from Nepal. SEA said that the products, which Nepal exports, flouted rules of origin and should not be allowed under any circumstances.

• Bloomberg quoted the chief executive officer of Green Plains Inc as saying that Chinese buyers are gearing up to buy US ethanol as part of the phase-one trade deal between the USA and China. He said that US ethanol shipments to China could reach between 300mil and 1bil gallons. In comparison, China’s peak imports of US ethanol were 198mil gallons in 2016.

• Malay Mail quoted the Malaysian Palm Oil Association as dismissing any heavy impact of the EU’s ban on local producers as there are other markets available. The MPOA’s members are feeling upbeat over increased demand for palm oil in the domestic markets in Malaysia and Indonesia. In terms of national policies, MPOA chief executive referred to Indonesia’s B30 mandate and Malaysia’s intention of implementing the B20 biodiesel fuel policy.

Source: AmInvest Research - 3 Feb 2020