• China will reduce the tariffs on US$5bil worth of imports from the USA from 14 February 2020 pursuant to phase 1 of the US-China trade deal. Some of the tariffs will be lowered from 10% to 5% and from 5% to 2.5% for other products. China will reduce the import tariffs from 30% to 27.5% for US soybeans and from 35% to 30% for US pork.

• Bloomberg reported that in the final determination, the US Commerce Department has recommended upholding anti-dumping duties on imports of Argentine biodiesel. The department had reconsidered whether the duties should remain in place on imports of the fuel, which US biodiesel producers said were coming into the US below the cost of production.

• Bloomberg also reported that Indonesia’s Pertamina had requested a plan that can guarantee the volume and price of palm oil used for green fuels as it develops refineries to produce the fuels. Pertamina will start the production of green diesel and green gasoline at the Cilacap refinery in year 2022F. The refinery has an annual output of 300,000 tonnes and it will produce the first B100.

• In a conflicting development, the Jakarta Post cited state-owned electricity company, PLN as saying that using pure crude palm oil or B100 in diesel-fired power plants “creates crust in the machines that may damage the plant’s machines components”. The plants also produced up to twice the carbon dioxide emissions compared with diesel fuel. The Indonesian Truck Operators Association has also complained about, among other things, water damage and blockage in vehicle engines since using B20.

• Reuters reported that Corteva Inc will accelerate the production of its next generation biotech soybean seeds and complementary herbicides in the US and Canada over the next five years. Up to 20% of US soybean acres this year could be planted with Corteva’s Enlist E3 soybeans, which are genetically modified to withstand applications of three different weed killers. This is up from Corteva’s prior estimate for plantings on 10% of US acreage.

• According to Reuters also, a recent US court decision striking down three biofuel waivers that the Environmental Protection Agency (EPA) gave oil refineries in 2017 has cast doubt on the legitimacy of dozens of other EPA exemptions granted under similar circumstances. This is expected to result in uncertainties for a handful of independent refiners that secured lucrative waivers from the Trump administration and may increase prices for biofuel blending credits. The biofuel industry has been unhappy by a near quadrupling of waivers granted by the Trump administration, saying that it undermines the demand for corn-based ethanol.

Source: AmInvest Research - 10 Feb 2020