Bloomberg reported that Indonesia will apply a progressively escalating export levy when the CPO price exceeds US$695/tonne (RM2,898/tonne). However, the new system will not be effective until the finance minister issues a new regulation. Under the new system, export levy will be increased by US$15/tonne for a US$25/tonne rise in CPO prices. When CPO prices are between US$670 (RM2,794/tonne) and US$695/tonne (RM2,898/tonne), the levy will be US$60/tonne. When CPO prices are below US$670/tonne (RM2,794/tonne), the levy will be US$55/tonne.
According to Bloomberg also, the Malaysian Palm Oil Association and Malaysia Estate Owners Association are appealing to the Sabah state government to allow plantations to have 100% workforce and for mills to have longer operating hours. In a letter to the state government, the two groups said that workforce capacity limit of 50% and shorter operating hours at the palm oil mills will affect the ability to purchase and process FFB from the smallholders. Currently, palm oil mills are only allowed to operate from 6am to 6pm instead of the usual 20 hours per day.
In a related development, Reuters quoted the Malaysian Estate Owners’ Association (MEOA) as saying that Sabah could see crude palm oil production falling by as much as 300,000 tonnes a month after the new coronavirus restrictions in the high crop season. The MEOA warned that the new restrictions could cut the state’s CPO production by half. An MEOA official said that palm oil mills typically operate up to 22 hours a day during the peak production season from September to January and a reduced 12-hour shift could lead to a massive backlog. The restrictions will affect more than 1.54mil ha of palm plantations, 132 palm oil mills, 12 palm kernel plants and 11 palm refineries, involving over 220,000 employees.
Reuters also reported that China’s soybean imports from Brazil jumped 51.4% YoY in September 2020 as cargoes purchased earlier in the year cleared customs. China received 7.25mil tonnes of soybeans from Brazil in September 2020 compared with 4.79mil tonnes in September 2019. Chinese bean crushers booked large volumes of Brazilian soybeans earlier in the year due to margins lifted by robust demand to feed a domestic pig herd recovering from the impact of the African swine fever. In total, China brought in 9.8mil tonnes of soybeans in September 2020, up 19% YoY.
Foodnavigator Asia reported that the uptake and demand for certified sustainable palm oil (CSPO) in the major Asian markets such as India and China are extremely low compared to the available supply. This is in spite of the global demand for rigorous sustainability certification processes. According to RSPO’s strategic stakeholder relations director Salahudin Yaacob, the minimum pull for CSPO from India and China are at just 5% and 2% respectively. Also, demand for CSPO from the producing countries is almost non-existent. As a whole, only 4% of the take-up of palm oil in Malaysia is CSPO. The largest consumers of CSPO are Europe and North America. About 62% of palm imports in Europe are CSPO while roughly 70% of the US’ palm imports are CSPO
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