• US soybean and corn prices rose last week as a USDA (the US Department of Agriculture) report revealed that planted areas in the US were below market expectations. US farmers are now expected to plant 83.8mil acres of soybeans this year compared with market estimates of 84.8mil acres. Corn planted areas are forecast to be 92.0mil acres this year against market expectations of 95.1mil acres. Inventory of US corn stood at 5,224mil bushels as at 1 June 2020 vs. 5,202mil bushels as at 1 June 2019. Stockpiles of US soybean stood at 1,386mil bushels as at 1 June 2020 against 1,783mil bushels a year ago.

• Bloomberg quoted Dorab Mistry as saying that India’s vegetable oil demand may recover to pre-Covid-19 levels in 2Q2021. Commodities across the globe are suffering from a lack of demand amid oversupply currently. He added that the import duties of vegetable oils in India should increase to help local farmers boost oilseeds production and make the country selfsufficient in edible oils. An official at Adani Wilmar said that household consumption of palm oil, which accounts for 18% of total demand, would rise to partially make up for the decline in usage by hotels and restaurants. HORECA (hotels, restaurants and catering) account for 33% of total palm oil consumption in India.

• Bloomberg also reported that China’s imports of US soybeans fell YoY in May 2020. China bought 491,697 tonnes of US soybeans in May 2020, down 46% from 906,139 tonnes in May 2019. On the other hand, soybean imports from Brazil rose to 8.86mil tonnes in May 2020 from 6.35mil tonnes in May 2019. China’s soybean imports climbed by 27% YoY to 9.4mil tonnes in May 2020 as crushers increased purchases of cheap supplies from Brazil.

• According to Reuters, Malaysian palm plantations have urged the government to let foreign workers return, warning of severe damage to the palm oil industry if it was not granted an exemption from the freeze on hiring. Thousands left the plantations in Malaysia for home as borders closed during the Covid-19 outbreak. The Malaysian Estate Owners Association said that a major concern is that the peak crop production season is around the corner and the palm oil industry is crucially dependent on the availability of foreign workers.

• Reuters also said that China has approved the imports of two genetically modified soybean varieties, including one developed by a local firm called Beijing Dabeinong Technology Group Co. Dabeinong signed an agreement with Argentinian biotechnology company Bioceres SA in 2013 to help it get regulatory approval for production of its glyphosate- and glufosinate-resistant soybean in Argentina. The Argentinian authorities granted safety approval for the variety in February 2019 but it has not been planted yet pending approval by Beijing. With approval from China, the seed can now be marketed for production in Argentina.

• Beveragedaily.com reported that Indonesia is inching closer to a sugar tax. The government has proposed to levy excise taxes of IDR1,500 to IDR2,500 per litre on sugar sweetened beverages. It is not known when the sugar tax will be implemented in Indonesia. The Ministry of Industry said that it intends to analyse the impact of the new taxes on the beverage industry first. A ministry official said that the ministry has been carrying out a quantitative impact analysis with input from industry associations and players.

Source: AmInvest Research - 6 Jul 2020