• Reuters cited government officials as saying that the Indonesian authorities have yet to decide on whether to cut their CPO export levy as the levies remained at their highest for five months in a row. Indonesia’s deputy minister of food and agriculture said that the authorities routinely review the levy but no decisions about cutting levies have been made yet. Indonesia’s director-general of the industry ministry said that the issue was being debated but nothing had been decided. Downstream sector industry groups showed support for a higher levy for palm oil, saying it guaranteed supply and higher value-added palm oil shipments.

• Reuters also reported that Cargill Inc is building a US$200mil palm refinery in Lampung, southern Sumatra, which is expected to be completed late next year. The new refinery is part of a push by Cargill to fully oversee its palm oil supply chain “from plantation to customer” to meet North American and European demand for more sustainable palm oil. The construction of the refinery has started and is slated to be completed in late 2022F.

• According to the National Post, customs data showed that China’s soybean imports rose in May from the previous month as more cargoes from Brazil cleared customs. China brought in 9.61mil tonnes of soybeans in May, up 29% from 7.45mil tonnes in April when some Brazilian shipments were delayed. An industry expert said that the figures were within market expectations. He added that imports during the May–July period are usually quite large each year. Other industry experts said that soybean arrivals in the next two months are expected to exceed 10mil tonnes, adding to the already healthy supplies of beans.

• Bloomberg reported that Neste Oyj, the world’s biggest renewable-diesel producer, is looking to convert everything from tree limbs to landfill garbage into fuel for motor vehicles and planes as demand surges for low carbon fuel sources. In Canada’s Quebec province, Neste aims to build a refinery that would use forestry waste such as tree tops and branches to produce renewable diesel. The push for new feedstock comes as Neste is also looking to expand into the markets for “green” jet fuel and bioplastics. Neste has a head start as the world’s biggest maker of sustainable aviation fuel.

• According to the Financial Times, China’s import appetite has raised prospects in the US Farm Belt. The US is on course to ship a record US$37.2bil worth of farm goods to China this year, led by sales of soybeans, corn, tree nuts, beef, wheat and poultry, the USDA forecasts. This is 23% of USA’s agricultural exports, estimated at US$164bil this year. Increased demand from China, along with supply constraints on corn and soybeans caused by a drought in Brazil, have driven a surge in global food prices.

Source: AmInvest Research - 14 Jun 2021