• Bloomberg said that palm oil’s bull run would face headwinds in the coming year as China buys increasing amounts of soybeans due to the aggressive expansion of the country’s hog industry. An industry expert in China said that the extra soybean oil supplies will replace imports of palm oil and other edible oils. The recovery in hog numbers will boost soymeal demand by 8% to 10% and drive soybean imports to a fresh record. Purchases of palm oil by China may drop to a three-year low in 2020/2021F.

• Reuters reported that Indonesia and Malaysia are looking to join forces for the first time to run an advocacy campaign in Europe where increasingly tight regulations are threatening sales. Through the platform of the Council of Palm Oil Producing Countries (CPOPC), the two countries have sent out a request for proposals to hire an advocacy firm to run a campaign in Europe. Consumer sentiment has been turning against palm oil despite efforts by producers to promote their sustainability measures. EU palm imports are forecast to fall to 6.7mil tonnes in 2020/2021F, which is the lowest in a decade according to data from the USDA.

• Bloomberg reported that oil palm planters in Sabah are planning a voluntary lockdown on estates for the next 30 days starting 25 January following a spike in Covid-19 cases. The decision to implement the lockdown was made after a series of meetings with the Sabah state government. The palm industry requested the state government to allow logistical movement of essentials during the period. Oil palm estates will be allowed to operate but with strict standard operating procedures. Planters will carry out Covid-19 testing on all personnel and workers during the period.

• According to Reuters, Boeing will begin delivering commercial planes capable of flying on 100% biofuel by the end of the decade. Boeing’s goal — which requires advances to jet fuel systems, raising fuel-blending requirements, and safety certification by global regulators — is central to a broader industry target of slashing carbon emissions in half by year 2050F. Commercial flying currently accounts for about 2% of global carbon emissions and 12% of transport emissions according to data cited by the Air Transport Action Group. Boeing has just a decade to reach its target as jetliners that enter service in year 2030F will typically stay in service until 2050F.

Source: AmInvest Research - 2 Feb 2021