• Bloomberg cited Indonesia’s Energy and Mineral Resources Ministry as saying that the country consumed 4.3mil KL (3.7mil tonnes) of biodiesel in 1H2021. Consumption of the palm biodiesel in 1H2021 accounted for 46.7% of full-year target of 9.2mil KL (8.0mil tonnes). Although mobility curbs due to the pandemic have slowed fuel use in the transport and industry sectors, the government is optimistic that biodiesel will meet the consumption target by the end of the year.

• According to the Oils and Fats Magazine, which quoted World Grain, China plans to build 10.85mil tonnes of extra storage capacity to increase grain stockpiling. Media reports said that Sinograin may be buiding 20 storage capacities in 18 provincial administrations this year. The China Reserve Grain Management Group Co Ltd (Sinograin) is involved in grains and oil storage, processing, trade, storage and logistics. World Grain said that China has strengthened its focus on food security and pledged to increase grain supplies, and has more than 650mil tonnes of grain storage capacity.

• Reuters reported that China’s soybean imports are set to slow sharply in late 2021E from a record first half, just as US farmers are looking to sell their new crops. A collapse in the hog sector’s profitability and a sharp rise in wheat feed use are crimping demand in China, where imports this year may now be less than 100mil tonnes compared with a recent US forecast of 102mil tonnes. A key driver of the slowdown in soybean use has been the reversal in hog margins, which started the year strongly as farmers tried to rebuild herds after a deadly outbreak of African swine fever (ASF) but then collapsed along with pork prices as fresh ASF outbreaks sparked herd liquidations and a surge in pork output.

• The Rio Times quoted industry officials as saying that Argentina’s soybean oil exports are likely to increase and drive down international prices due to a new law that reduces the volume of soybean oil-based biodiesel that is blended with regular biodiesel. The new law provides for a minimum use of biodiesel of 5% in diesel, down from 10% previously. With the 10% blend, Argentina used to consume about one million tonnes of biodiesel per year. With the new measure, the volume would be reduced by half, according to an industry player.

• According to the Biodiesel Magazine, the US Energy Information Administration (EIA) forecasts that US renewable diesel production capacity will reach 5.1bil gallons per year (330,000 barrels per day) by year 2024F, up from 600mil gallons per year (38,000 barrels per day) in 2020. According to the EIA, most of the increase in capacity will come from retrofitting idle petroleum refineries. Also, the EIA predicts that renewable diesel production capacity would represent 20% of total diesel production in the West Coast by year 2024F and 4% of the total estimated diesel production capacity in the Gulf Coast. In the entire USA, renewable diesel capacity would account for 5% of total diesel production capacity in year 2024F.

• Wisconsin State Farmer cited a University of Illinois report that US corn and soybean varieties have become increasingly heat and drought resistant as agricultural production adapts to a changing climate. But the focus on developing crops for extreme conditions has negatively affected performance under normal weather patterns. The researchers found that while heat and drought tolerance have increased yield by 33% for corn and 20% for soybeans over 1951 to 2017, the gain was offset by reduced productivity under normal conditions. Overall, maladaptation due to climate-related factors has reduced corn and soybean yield by 8% and 6% respectively.

Source: AmInvest Research - 2 Aug 2021