• Bloomberg quoted Indonesia’s trade ministry as saying that the country will issue a monthly palm oil export quota to ensure adequate local supply. The government is developing an app for exporters to submit their plans. The app is expected to be completed in two weeks. The government is still discussing the export volumes, which may be three times the size of the bulk cooking programme. Producers who join the government’s cheap bulk cooking oil distribution programme can decide whether to claim the subsidy or request for export permits.

• Reuters quoted dealers as saying that India’s palm imports in June are unlikely to spike despite Indonesia’s decision to lift its ban on overseas shipments as a rally in palm oil prices has made soybean oil more attractive for refiners. CPO was being offered in India at about US$1,750/tonne including cost of insurance and freight for June shipments compared with US$1,820/tonne for crude soybean oil. Dealers said that India’s palm imports could rise to 550,000 tonnes in June from 500,000 tonnes in May.

• Argus Media reported that Germany’s environment ministry is working on a proposal to phase out the use of biofuels produced from food and feed crops by 2030F. A working paper released by the ministry suggests lowering the use of crop-based biofuels to comply with Germany’s greenhouse gas emission reduction quota to 2.5% in 2023F from 4.4% in 2022F. The cap would then fall to 2.3% in 2024F, 2.1% in 2025F, 1.9% in 2026F-2027F, 1.2% in 2028F– 2029F and then to zero in 2030F. To compensate, the working paper suggests increasing the multiplier for electricity used to charge e-cars to 4 from 3 currently and the multiplier for use of green hydrogen and PtX-fuels to 3 from 2.

• Bloomberg reported that the Biden administration is advancing a plan to give small oil refineries more flexibility in fulfilling biofuel blending quotas when the facilities are denied exemptions from the requirements. A draft rule under review at the White House would create an “alternative RIN (biofuel credits) retirement schedule for small refineries”. The EPA is set to finalise biofuel blending quotas for 2022F and 2021 and retroactively revise 2020 requirements by 3 June.

• National Post of Canada reported that China has ended a 3-year ban on Canadian canola. According to government officials, 2 major players in Canada’s canola industry have been given permission to resume exports. Two of Canada’s biggest agricultural companies, Richardson International and Viterra Inc have been banned from shipping canola to China since 2019 when they found themselves entangled in geopolitical issues between China and the USA.

• The Telegraph of the UK reported that the world has just 10 weeks’ worth of wheat stockpiled after Russia’s invasion of Ukraine disrupted supplies. Official government estimates put world wheat inventories at 33% of annual consumption but stocks may have slumped to as low as 20%, according to agricultural data from Gro Intelligence. Gro Intelligence chief executive Sara Menker warned global food supplies are being hit by a number of extraordinary challenges including fertiliser shortages, climate disruptions and record low inventories of cooking oil and grains.

Source: AmInvest Research - 30 May 2022