• Bloomberg reported that Malaysia has formed a working committee with the US CBP (Customs and Borders Protection) to address the issue of forced labour. Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin said that the move would help resolve the “longstanding issue that has unfairly plagued local industries, in particular palm oil and rubber”. She added that she is confident that an amicable resolution is within reach in the near term.

• Bloomberg quoted Brazilian soybean seed company Boa Safra Sementes SA as saying that skyrocketing fertiliser prices may drive soybean farmers in the country to bet on genetically modified seeds to guarantee good yields. Orders of the company’s soybean seeds rose 59% YoY to 742mil reais (US$147mil) in 1QFY22. Genetically engineered seeds accounted for 90% of the orders, up from 80.7% a year earlier. Brazilian farmers are also boosting investments in technology to map their properties to make better decisions based on a precise analysis of the soil.

• Reuters reported that the White House is expected to announce in the coming weeks the amount of biofuels like corn-based ethanol that US refiners must blend into their fuel this year, a decision that will force it to weigh taming consumer inflation against supporting the country’s farmers. The White House National Economic Council is poring over numbers to gauge whether lower blending mandates for ethanol and renewable diesel will help blunt rising food and fuel prices, according to sources. White House officials are meeting with lobbying groups representing oil and gas consumer goods giants, including the food manufacturing coalition, the American Bakers Association, American Petroleum Institute and Renewable Fuels Association, as they weigh the possible changes.

• Reuters quoted Dorab Mistry as saying that buyers in China are no longer big bulls in the commodities market as they face an economic slowdown while the country practises a zeroCovid policy. Mistry maintained his forecast for Malaysia’s CPO output of 19mil tonnes for this year while Indonesia’s CPO production is seen rising by 2mil tonnes at least. He also maintained his price forecast for CPO, pegging a decline to RM5,000/tonne by June and RM4,000/tonne by September.

Source: AmInvest Research - 23 May 2022