• S&P Global Platts cited sources as saying that China’s soybean market has weakened on negative crushing margins and lower downstream demand for vegetable oils amid Covid-19- related movement restrictions and lockdowns in many cities. Also, Sinograin has been releasing soybean oil in the domestic market as part of its stock-rotation strategy. This has led to downward pressure on soybean oil prices. The market is expecting the national reserve to release 3.5mil tonnes of soybeans. About 350,000 tonnes of soybeans will be released each week for 10 consecutive weeks. The official announcement stated that on 1 April, 1.5mil tonnes of imported soybeans will be auctioned, without giving details on the rounds of auctions.

• Reuters reported that Indonesia’s anti-trust agency is investigating eight cooking oil producers on suspicion of cartel practices amid high retail prices. The agency known as KPPU first launched its probe in January when cooking oil prices were surging and is now focusing on eight companies that control more than 70% of Indonesia’s cooking oil market. Since the removal of price caps for branded cooking oil, supplies are back on the shelves at supermarkets but at high prices of over 50,000 rupiah for two-litre containers.

• Bloomberg quoted President Joko Widodo as saying that as many as 20.5mil households and 2.5mil streetside sellers in Indonesia will receive cash aid to ease the burden of high cooking oil prices. Eligible recipients will get 300,000 rupiah (US$21) and will be paid upfront in April to cover three months.

• Bloomberg also reported that India has extended the validity of a rule that imposes limits on edible oils and oilseed inventories by six months to ease rising prices. The cap on stockpiles will be in place until 31 December 2022. Exporters and importers are exempted from the limits with some conditions.

• Reuters cited the Buenos Aires Grains Exchange as saying that early frosts in Argentina’s farming belt could cause further losses for soybean and corn in the 2021/2022F season. The agency had already cut its forecast by two million tonnes for soybean and seven million tonnes for corn due to the drought between December 2021 and January 2022. Currently, Argentine production is forecast to be 42mil tonnes for soybean and 49mil tonnes for corn for this season.

• Biofuels International quoted the EU Biofuels Chain as urging the bloc not to encourage member states to reduce their biofuel blending mandates and consider the negative effects that this may have. This was in response to the recently published Commission Communication on Food Security, which expressed its support for member states to reduce the blending proportion of biofuels. EU Biofuels Chain said that there does not need to be a trade-off between the EU’s food security and climate goals.

Source: AmInvest Research - 11 Apr 2022