• Bloomberg reported that soybean processing plants in a north-eastern Chinese city have been ordered to shut down for at least a week, the latest fallout from Beijing’s moves to cut energy consumption and secure dwindling power supplies. Plants in Tianjin stopped operations last week and may not resume operations until next month. The units have a combined soybean processing capacity of about 25,000 tonnes per day. Some of the plants, including those operated by Louis Dreyfus and Bunge Ltd, had to suddenly stop after the government cut power supplies.

• Bloomberg also said that China’s imports from the USA have hit the halfway mark of the US$200bil worth of additional goods and services it promised to buy under Phase 1 of the trade deal reached last year. Beijing imported US$10.5bil worth of manufactured, agricultural and energy products from the USA in August. Beijing missed the target last year amid the pandemic and China is unlikely to meet the goal again by the end of this year.

• S&P Global Platts cited sources as saying that South American FOB soybean meal basis levels have soared to record levels amid firm Indian demand and Hurricane Ida’s effects on the Gulf Coast’s export facilities. In Brazil, the FOB Paranagua basis reached +US$49/tonne to CBOT prices on 15 September. This was the highest S&P Global Platts assessment for a front-month soybean meal shipment. In late August, India said it was seeking 1.2mil tonnes of genetically modified soybean meal for animal feed use amid rising costs of feedstock. Also, the impact of Hurricane Ida forced international buyers to shift from the US to other origins with Argentina coming up as a natural source.

• According to theedgemarkets.com, FGV Holdings is believed to be eyeing its maiden oil palm venture in India’s state of Telangana after news reports indicated that FGV representatives had met government officials there to propose the setting up of an oil palm processing unit in Sircilla and other parts of the state. The New Indian Express said that KT Rama Rao, who is Telangana’s Minister for Municipal Administration and Urban Development assured that he would soon be visiting Malaysia. KT Rama Rao also asked FGV to establish a seed processing unit and an oil palm nursery in Sircilla along with the oil palm processing factory.

• Reuters cited an industry expert as saying that India’s palm oil imports in 2021E/2022F are likely to drop 9% from a year earlier on a rise in domestic supplies as farmers expand planting areas in respond to high prices. According to Govindbhai Patel, managing director of GG Patel and Nikhil Research Company, India’s palm imports could fall to 7.6mil tonnes in 2021E/2022F from 8.35mil tonnes this year. Edible oil supplies are likely to rise nearly 6% to 8.5mil tonnes as domestic soybean and rapeseed production rise.

Source: AmInvest Research - 4 Oct 2021