• Bloomberg reported that Indonesia will be allocating 7.28 trillion rupiah (US$54.3mil) from the palm oil export levy to subsidise bulk and unsubsidised cooking oil. Each month, about 202mil litres of cooking oil will be subsidised for six months to keep prices at or below Rp14,000/litre (RM4.11/litre). Subsidy value is estimated to be around Rp6,398/litre (RM1.88/litre) and will be reviewed every two weeks.

• Bloomberg also said that the world’s agricultural superpowers are divided over whether Russian fertilisers should be sanctioned as surging prices threaten to further stoke food inflation. Brazil has argued for keeping crop nutrients sanction free in the name of food security. On the other hand, the US is leaning towards upping the ante against Russia. Brazil imports more than 85% of its fertiliser with dependency on imports exceeding 90% for potash and nitrogen. Russia and Belarus account for a combined 28% of the total.

• Free Malaysia Today reported that Malaysia is expected to collect more than RM1.0bil from the palm windfall tax in 2022F based on average CPO price of RM4,250/tonne and CPO production of 19mil tonnes. Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin said that the palm industry is also estimated to generate another RM2bil in revenue from the CPO export tax. Zuraida added that China is expected to import another 500,000 tonnes of palm oil form Malaysia in 2022F while India will be importing an additional two million tonnes.

• According to the World Health Organization (WHO) in its report titled “Sugar-sweetened beverage taxes in the WHO European Region”, taxes on sugar-sweetened beverages can help countries fight diseases and make people healthier but the tax can be more effective if they are developed in collaboration between the health and finance agencies. To introduce effective taxes, the WHO finds that the tax base needs to reflect the health burden of the consumption as wells as the cultural patterns of the country. Also, introducing any form of sugar tax would face active opposition form the F&B industry. But with high government interest in adopting such policies and limits on the industry’s involvement in the sugar tax discussion, the impact of the opposition can be minimised.

• MercoPress reported that the Argentina government has reopened exports of soybeans and their by-products after a decision to close the registry for export sales was made on 13 March. After export duties on soybean meal and oil were raised to 33% from 31% and a Wheat Stabilisation Fund was created, the Agriculture Ministry has reinstated applications for soybean meal and oil export permits.

Source: AmInvest Research - 28 Mar 2022