• The Financial Express reported that edible oil prices, which have been soaring since February due to geopolitical tensions and Indonesia’s export ban on palm products, could decline by 15% by June. Angshu Mallick, the CEO and MD of Adani Wilmar, said that prices have peaked and should start correcting from next month onwards. Also, Indonesia may lift the ban on exports by 10 May. According to Mallick, as Indonesia is a palm surplus country, it cannot afford to hold stocks for long and is also short on storage.

• Bloomberg reported that Malaysian palm oil plantations and processing facilities will need to comply with new sustainability standards launched in March. Companies will be re-audited based on new standards beginning 1 January 2024. The assessment will now include forced labour standards, greenhouse gas measurements and traceability/legality of fresh fruit bunches.

• Reuters quoted EU vegetable oil group, Fediol, as saying that Indonesia’s ban on palm products does not raise concerns for supply in the EU market as the bloc has reserves for several weeks. Fediol said that the EU imports about 335,000 tonnes of crude palm oil from Indonesia on average per month, representing over 40% of total imports. Fediol added that there are currently 4 to 6 weeks of palm oil volumes available in the European storage facilities and the temporary decision by the Indonesian government does not give rise to concerns for the supply in the European market in the short term.

• According to the Business Standard, the India government has expressed hope that the country has adequate stocks of edible oils to tide over Indonesia’s ban on palm products. The government said that the country has 2.1mil tonnes of edible oils in stocks at present while another 1.2mil tonnes are in transit from exporting countries and are expected to arrive in May. As per independent assessments, these are good enough to cover around 3 months of domestic requirements as India consumes about 1-1.1mil tonnes of edible oils on average per month.

• Reuters reported that Nutrien, the world’s largest fertiliser company, is weighing further increases to potash production as sanctions continue to limit shipments from Russia and Belarus. Nutrien is assessing the duration of the Ukraine conflict to determine whether there is a need to ramp up production. In March, Nutrien said it planned to increase output by nearly 1 million tonnes to 15mil tonnes this year in response to supply uncertainty from Eastern Europe.

Source: AmInvest Research - 9 May 2022