• Reuters reported that Malaysia is taking legal action at the World Trade Organization (WTO) against the European Union (EU) and member states France and Lithuania for restricting palm-based biofuels. Malaysia, which has labelled an EU renewable-energy directive as “discriminatory action”, is seeking consultations under the WTO’s dispute settlement mechanism. Plantation Industries and Commodities Minister Datuk Dr Mohd Khairuddin Aman Razali said that the EU directive “will mean the use of palm oil as biofuel in the EU cannot be taken into account in the calculation of renewable energy targets and in turn, create undue trade restrictions to the country’s palm oil industry”.
   
• Reuters also reported that Indonesia’s PT Pertamina had started trials on diesel made entirely out of palm oil at its Cilacap refinery on Java Island after conducting trials on jet fuel late last year. The biodiesel refinery at Cilacap is expected to produce as much as 3,000 barrels of biodiesel made out of 100% palm oil per day. Pertamina conducted trials of the “Green Diesel” from 9 to 16 January. Trials for the jet fuel took place at the end of December 2020.
   
• According to Reuters, Brazilian soybean traders CJ Selecta, Caramuru and Imcopa have committed to zero deforestation in their respective supply chains, adding pressure on larger traders to accelerate environmental commitments. Their pledge involves a ban on trading soybean grown on land deforested after August 2020 in all of Brazil, going beyond a previous agreement that had only applied to the Amazon rainforest. Their commitment is the first of its kind for Brazilian soybean suppliers, putting pressure on the larger players such as Cargill and Bunge, which exported 5.6mil tonnes or 23% of total soymeal in 2020.
   
• Bloomberg reported that China’s corn imports more than doubled in 2020 to a record 11.3mil tonnes from the previous year as the country increased purchases to meet a domestic shortage amid a recovery in hog numbers and shrinking state reserves. Corn imports in December 2020 also hit an all-time high of 2.25mil tonnes according to customs data. Feed mills have been snapping up supplies at weekly state auctions to replace corn with wheat. Nearly four million tonnes of wheat from the state reserves were sold two weeks ago to meet demand.
   
• Bloomberg also reported that Indonesia will be allocating Rph5.4 trillion (US$384.5mil) for the replanting of oil palm in 2021F. The funds will be used to replant 180,000ha of oil palm plantations owned by smallholders. Indonesia spent Rph2.67 trillion (US$190.1mil) in 2020 to replant 94,033ha. This year, the government will provide Rph30 mil perha to each smallholder who owns 4ha of oil palm estates. Indonesia has 16.38mil ha of oil palm plantations with 6.72mil ha belonging to smallholders.

Source: AmInvest Research - 25 Jan 2021