• Bernama reported that India wants to reduce its reliance on edible oil imports to 45% of its consumption by year 2025F from 60% currently. To increase domestic availability and reduce import dependency, India has proposed the National Mission on Edible Oils for the next five years. The plan aims to increase the production of oilseeds to 47.8mil tonnes annually by 2025F from 30.88mil tonnes presently. Import dependence will be reduced to 45% from 60% by raising the annual domestic edible oil production to 18mil tonnes.

• Bloomberg cited the Council of Palm Oil Producing Countries as saying that the new rule on chemical contaminant in vegetable oils to be imposed by the EU in 2021F would threaten exports of palm oil. The council plans to file a complaint to the WTO after the EU has sent a notice of rule to the global trade body. The ministers of the member countries in the council will meet in Jakarta in March to discuss actions. Members of the council include Malaysia, Indonesia and Thailand.

• According to Bloomberg also, US farmers would be making planting decisions this month. They will decide whether to plant more corn or soybean in the upcoming season. Also, fall harvest prices and insurance policies for US corn and soybean are determined in February. The USDA (US Department of Agriculture) will release the Prospective Planting Report at the end of March. When soybean prices are less than 2.5x of corn, soybean is more profitable. Currently, the ratio is close to 2.3x.

• Reuters reported that Sime Darby Plantation is committed to working with environmental groups after a senior executive called for government action against them. A few weeks ago, Datuk Franki Anthony Dass, chief advisor and value officer, told an industry forum that NGOs were orchestrating attacks on palm oil. Sime Darby Plantation said that Franki’s comments were made in his capacity as the chairman of the Malaysian Palm Oil Certification Council and they do not refer to all NGOs.

• In response to Franki’s comments on NGOs, Free Malaysia Today reported that several international organisations have hit out at Malaysian palm oil players, which have branded the NGOs as “toxic entities” running a “black campaign”. The organisations said that they have the right to expose the realities faced by the indigenous communities due to the impact of palm cultivation. The NGOs said they are not against palm oil but they cannot accept the reckless environmental destruction and human right abuses that accompany palm oil production.

• The USDA has released its monthly demand and supply projections for vegetable oils. The USDA reduced its forecast of US soybean stocks for 2019/2020F by 10.5% to 425mil from 475mil bushels due to higher exports. Comparing 2019/2020F against 2018/2019, US soybean inventory is expected to decline by 53.2% to 425mil from 909mil bushels. US soybean production is envisaged to fall by 19.6% to 3,558mil in 2019/2020F from 4,428mil bushels in 2018/2019 due to lower yields and smaller planted areas.

• The USDA raised its forecast of global soybean inventory for 2019/2020F by 2.2% to 98.86mil from 96.67mil tonnes mainly due to higher stockpiles in Brazil. The USDA raised its estimates of soybean production in Brazil to 125mil from 123mil tonnes and carry-over inventory to 30.42mil from 30.26mil tonnes. Global soybean production is forecast to decline by 5.4% to 339.4mil tonnes in 2019/2020F from 358.65mil tonnes in 2018/2019 dragged by the fall in US soybean output.

Source: AmInvest Research - 17 Feb 2020