• Bloomberg reported that the US Customs and Border Protection will seize Sime Darby Plantation’s palm oil and merchandise containing palm oil at all of US ports due to the determination that the company had used forced labour. These include products from Sime’s subsidiaries and joint ventures.

• Bloomberg also said that the Environmental Protection Agency (EPA) has finalised plans to give US refineries more time to prove that they have fulfilled 2020, 2021 and 2022F biofuel blending requirements. According to Growth Energy CEO Emily Skor, by continuing to delay compliance deadlines, the EPA is creating uncertainty in the market place and stunting the blending of biofuel needed to decarbonise the transportation sector.

• Reuters quoted GAPKI (Indonesia Palm Oil Association) as saying that Indonesia’s palm oil exports are expected to fall 3% to 33.2mil tonnes in 2022F as local demand increases. CPO production growth is seen to be 4.5% in 2022F. Shipments from Indonesia reached 34.2mil tonnes in 2021 while output was 46.9mil tonnes.

• S&P Global Platts quoted traders as saying that grain trade in the Black Sea region remains largely unmoved by the ongoing tensions between Russia and Ukraine and in the near term, grain exports from the region are likely to remain steady. Russia and Ukraine’s combined wheat exports for 2021/2022F are estimated to account for 23% of the global trade of 206.9mil tonnes according to the USDA. For corn, Ukraine is estimated to account for 16% of global corn exports.

• The Edge Markets reported that Indonesia has conducted early tests to produce gasoline from palm oil. Indonesia conducted a test flight using jet fuel mixed with palm oil last year and plans to carry out road tests for biodiesel containing 40% palm oil in February. The Indonesian Palm Oil Association estimates that biodiesel makes up 38% of the country’s domestic palm consumption in 2021.

• According to theSun, Malaysia will sign a memorandum of understanding with Saudi Arabia’s Savola Group on three areas of cooperation to further enhance Malaysia’s palm oil exports in the region. The Ministry of Plantation Industries and Commodities said that the initiatives include a joint campaign to promote Malaysian palm oil and the construction of a tank storage terminal in Jeddah, using Saudi Arabia as a re-export hub for Malaysian palm oil. The construction of a tank storage terminal in Jeddah would help overcome logistics problems, demurrage and long waiting times.

Source: AmInvest Research - 7 Feb 2022