• Bloomberg reported that Indonesia’s biodiesel consumption amounted to 6.17mil kiloliters (5.4mil tonnes) in 9M2020. The Indonesia government’s original target was 9.6mil kiloliters (8.4mil tonnes) for 2020E. However, the actual usage may fall 10% to 15% below the original target in 2020E as Covid-19 has reduced transportation activities and usage of fuels.
• According to Bloomberg also, the Brazil government will temporarily remove import tariffs on soybeans, corn, soybean meal and soybean oil. This is to help reduce food prices in the country. The tariff waiver will take place until 1Q2021 when the local soybean harvest starts. The import tariffs, which range from 8% to 10% depending on the commodity, apply to countries outside the Mercosur trade bloc.
• Reuters reported that India’s palm imports in September fell by 27% YoY to their lowest in three months due to lean demand from hotels and restaurants. On the other hand, soybean oil purchases jumped by 28% YoY in September 2020 on higher household demand. The Solvent Extractors Association of India (SEA) said that India imported 643,994 tonnes of palm products in September 2020 compared with 879,947 tonnes in September 2019.
• Platts cited market sources as saying that China’s state-owned companies are expected to buy a substantial amount of US soybeans in the coming weeks amid reports that the Chinese national reserve is expected to auction a major portion of its soybean stocks. As Brazilian old crop soybeans are almost fully sold and there have been delays in the planting of new crops, China’s buyers are focusing on US soybeans currently. A Chinese agriculture consultant said that China is not ready to face any supply-side uncertainty in 1Q2021 and as such, stateowned companies are looking to clear their soybean reserves and buy more US soybeans.
• Platts quoted Oil World as saying that the Argentinian soybean crushing industry has been operating well below its potential due to the currency crisis. Currently, a little over 33mil tonnes, which are more than 50% of Argentinian soybean stocks, are being hoarded by the farmers. They are waiting for the devaluation of the Argentinian peso. With limited raw soybeans supply, Argentinian crushers are struggling to meet rising global demand for soybean meal and oil.

Source: AmInvest Research - 26 Oct 2020