• Reuters reported that Chinese soybean crushers are expected to curtail operations sharply in the coming months due to harvest delays in Brazil, pushing up prices and likely leading to a rundown in inventories. The shortage will be widely felt and probably last until mid-April 2021. Drought delayed soybean plantings in Brazil in late 2020 while constant rains have disrupted harvest this year. An industry expert said that although some soybean crushing plants have made plans to suspend operations for a month, the situation is not as bad as last year. Feed and livestock producers learnt lessons from last year and have built up ample soymeal stocks in advance.

• Western Producers reported that the wheat sector is excited over the prospects of Canada entering trade negotiations with Indonesia. China was Canada’s top wheat market in 2020 but Indonesia has been its largest market on average over the past five years. Indonesia typically accounts for about two million tonnes or 11% of Canada’s annual wheat exports valued at US$600mil per year. While there is no tariff on wheat for human consumption in Indonesia, there is a small tariff on feed wheat. Australia has a free trade agreement with Indonesia that allows Australia to export 500,000 tonnes of feed grains tariff free in the first year of the agreement i.e. 2020, rising to 775,664 tonnes in Year 10. Canada would like to see a similar clause in any agreement it negotiates with Indonesia.

• According to S&P Global Platts, cumulative sugar production in Center-South (CS) Brazil between the start of the 2020/2021F season on 1 April and 16 February totalled 38.21mil tonnes, up 44.3% YoY. According to UNICA, which is Brazil’s sugar trade association, the amount of sugar produced in CS Brazil in the first half of February 2021 was 21,350 tonnes, with sugar’s share of the crush at 36.5% compared with 16.9% a year earlier. Mills in CS Brazil crushed 486,890 tonnes of sugar cane in the first half of February, up 185.7% YoY.

• The Star reported that the Malaysian Palm Oil Board (MPOB) has come up with a threewheeled utility farm vehicle equipped with a hybrid power electric sprayer system to assist planters with their maintenance work and transportation of palm fruits in the estates. The vehicle is light weight and suitable for various activities in the plantations including spraying pesticides using an electric pump as well as field applications by simply charging the rear platform. MPOB said that the selling price, which is below RM15,000 based on the type of accessories requested is the lowest in the local market for agricultural and plantation utility machinery.

• Bloomberg cited the National Post as reporting that Swiss voters have narrowly approved a free trade agreement with Indonesia yesterday with lower tariffs on palm oil imports as the main issue in the referendum. The vote was carried with a 51.7% to 48.3% margin, provisional official results showed. Under the European Free Trade Agreement with Indonesia, Switzerland will reduce the tariffs on palm oil by about 20% to 40% for up to 12,500 tonnes per year, only if sustainability standards are met.

Source: AmInvest Research - 8 Mar 2021