• Bloomberg cited the Indonesia Oil Palm Plantations Fund Management as saying that the country is estimated to have exported 2.78mil tonnes of palm oil from 1 January to 24 February 2022. The agency collected as much as Rph6.22 trillion from palm oil export levies from 1 January to 24 February. Indonesia exported 2.68mil tonnes of palm oil in January 2021 and 1.69mil tonnes in February.

• Also, China is buying US corn and soybeans as part of efforts to mitigate the risks to commodity supplies from Russia’s war in Ukraine and slower supplies in South America. Chinese buyers recently booked about 20 cargoes of American soybeans and 10 shipments of corn, according to traders. The US soy purchases are for shipments from May onwards.

• Bloomberg reported that excess US ethanol reserves could help ease skyrocketing prices at the gasoline pump, especially if the war in Ukraine leads to further spikes. An official with the US Renewable Fuels Association said that ethanol is currently 50 to 60 US cents per gallon cheaper than gasoline at most terminals and the spread will continue to widen in the coming weeks. He added that if the US is cut off from 600,000 barrels a day of crude oil and petroleum products from Russia, increased ethanol blending could help to fill the void as the US has close to 200,000 barrels per day of excess capacity that is not being used.

• S&P Global Platts quoted industry sources as saying that China’s soybean arrivals in February and March might be lower than expected due to slower loading in March and lower purchase volumes by crushers. On 22 February, China’s National Food and Strategic Reserves Administration announced that it will conduct auctions to release soybean from state reserves. A source said that the market is expecting about 3.8mil tonnes of soybean and 300,000 tonnes of soybean oil to be released and sold. However, the administration has not provided official details on the volume of stocks to be released and the timing of the auctions.

• Biofuel Digest cited a new study by the International Council for Clean Transportation as saying that the EU’s new proposals and proposed revisions to the Renewable Energy Directive would stimulate even more demand for used cooking oil (UCO) imports and lead to higher amount of fraudulent used cooking oil being imported into the EU. The study compares UCO collection and domestic use rates in six Asian countries to the quantities in demand for exports. The study casts doubts on the Asian countries’ ability to meet demand prompted by the EU legislation, increasing the risk that restricted feedstock such as virgin palm oil will be illicitly used to bulk of UCO quantities.

Source: AmInvest Research - 7 Mar 2022