• Dow Jones reported that Sime Darby Plantation (SDP) plans to eliminate the need for manual workers in all non-harvesting activities by the end of next year as the group automates parts of its operations. SDP expects to reduce the number of plantation workers by 55% by the end of 2023F and improve its land-to-man ratio to one worker for every 17.5 hectares by the end of 2024F. Industry average is one worker for every 8 hectares of land. By the end of 2027F, SDP aims to have a fully local workforce for its Malaysian plantation operations.

• Bloomberg reported that Indonesia is testing to see whether vehicles can run effectively on diesel blended with 40% cooking oil and if it works well at higher altitudes. About 6 Toyota minivans filled with 40% palm-based biodiesel will be zooming across Java Island in the coming weeks. They will set off from Dieng, an active volcano area in Central Java to see if the biodiesel can adapt to higher altitudes. Two formulas will be used in the test. One is a blend of 30% fatty acid methyl ester (FAME), 10% hydrogenated vegetable oil and 60% gasoil. The other uses a mix of 40% FAME and 60% gasoil.

• According to Bloomberg also, US farmers are having trouble in exporting soybeans. Although it is harvest time in the American Midwest, a drought is making rivers too shallow. As a result, it is difficult for barges to bring the crop to ports. American farmers need to ship their soybeans now because it is the only window in dominating world sales. If they fail, US inventories may stay bloated as Brazil will soon begin harvesting its mammoth crop. According to an industry expert, if shipments to China are pushed back behind schedule, buyers may cancel and switch to Brazil.

• S&P Global Platts cited sources as saying that a surging replacement crushing margin that has spurred buying interest from Chinese crushers and tight soybean supply for October and November shipments were pushing prices so high that it may soon cap demand. The soybean replacement crushing margin in China has surged 5x in a month to CNY1,240/tonne on 19 October. A Chinese buyer said that domestic consumption demand and tighter pork supply have driven up hog-raising margins.

• Reuters reported that Indonesia has found that the overall size of its palm oil plantations is bigger than its database currently. This was among several initial findings of a state audit of the industry. Authorities found that Indonesia has 16.8mil hectares of palm oil compared to the official figure of 16.4mil hectares. The government is collecting data on the size of each plantation, land legality status, production level and their palm oil selling prices. A government official said that planters found to have violated land use rules “will not be criminalised”. Instead, the government will collect a “reasonable amount” of fines.

Source: AmInvest Research - 31 Oct 2022