• Bloomberg reported that China is encouraging local governments and companies to increase grain reserves as Beijing reforms the central government storage system. A government official said that current wheat and rice reserves are sufficient to meet demand for a year. Existing policies require major provinces to hold enough reserves for half year of consumption while major cities must stockpile for 15 days.

• The National Post reported that Sri Lanka has banned imports of palm oil and new palm plantations. The government has also told producers to uproot existing plantations in a phased manner. Sri Lanka’s President Gotabaya Rajapaksa said that the aim was to make “the country free from oil palm plantation and palm oil consumption”. Companies and entities, which have done such cultivation, will be required to remove them in a phased manner with 10% uprooting at a time and replacing it with the cultivation of rubber or environmentally friendly crops each year. Sri Lanka has around 11,000ha of palm plantations with just over 1% of total areas planted with tea, rubber and coconut, according to estimates by the country’s Palm Oil Industry Association.

• S&P Global Platts quoted AgRural as saying that Brazilian soybean harvest gained traction in the week ended 3 April as weather turned dry in most states. Soybean farmers had harvested 78% of the projected acreage as of 1 April compared with 83% a year ago and the five-year average of 78%. Steady harvest progress in Brazil is likely to pressure US soybean shipments in coming days as Brazil’s soybean exports have picked up pace in March 2021. According to the foreign trade department’s report on 22 March, Brazil had exported 7.6mil tonnes of soybeans in the first three weeks of March compared with 49,498 tonnes and 2.9mil tonnes in January and February respectively.

• S&P Global Platts also cited Sandeep Bajoria, CEO of Sunvin Group, as saying that India’s vegetable oil imports are set for another subdued year in 2021F as refiners pass on high prices to the consumers and a resurgence of the coronavirus pandemic looms large in the country. He said that vegetable oil consumption fell by about two million tonnes to 21.5mil tonnes in 2020 and will remain at similar levels in 2021F due to high prices. India’s palm imports, which account for 60% of total vegetable oil imports fell from 9.4mil tonnes in 2019 to 7.2mil tonnes in 2020 and will mostly stay at this level in 2021F.

• Reuters cited sources as saying that the White House has directed the US Environmental Protection Agency to study how using renewable fuels to power electric vehicle charging could generate tradeable credits under the country’s biofuel programme. If the programme were expanded to include electric vehicles, the RINs (credits) would come from charging the vehicle using electricity produced by a renewable source of methane such as gas from dairy operations or landfills. The key questions are how to trace the credit eligible biogas from its origin all the way through to a car’s battery and who along the supply chain should be allowed to claim the credits.

Source: AmInvest Research - 12 Apr 2021