• Bloomberg quoted Indonesia Oil Palm Plantations Fund Management Agency as saying that Indonesia can support the implementation of its B40 biodiesel programme as biodiesel prices may be higher than gasoil in 2023F, the gap would not be too wide. The volume of biodiesel consumption in Indonesia may rise to 15mil kilolitres (KL) (13.1mil tonnes) per year if B40 is implemented compared with 11mil KL (9.6mil tonnes) for B30.

• The Star quoted caretaker Deputy Plantation Industries and Commodities Minister Datuk Seri Dr Wee Jeck Seng as saying that workers from Indonesia are at the top on the preferred list by plantation owners and smallholders. Indonesian workers have the expertise and experience in harvesting and collecting fresh fruit bunches (FFB). Wee said that the sector is facing a shortage of 80,000 workers and only 13,000 foreign workers were employed this year. An exercise to employ Malaysians in oil palm plantations resulted in a negligible increase of 0.6% this year.

• S&P Global Platts reported that cash free on board (FOB) basis levels for soybean meal and oil in Brazil have dropped below basis levels in Argentina, an unusual scenario that came amid supply uncertainties caused by poor soybean farmer sales and low crushing volumes in Argentina. On 25 October, the Brazilian FOB Paranagua soybean meal premium was assessed to be US$35/tonne for December loading while the Argentinian FOB Up River was US$37/tonne. According to official data, soybean crushing in Argentina amounted to 2.9mil tonnes in September, an 8.7% drop MoM drop and 22.4% decline YoY.

• Reuters said that soybean producers sold 70% of Argentina’s 2021/2022E crops two weeks ago. In comparison, 74% of soybeans were sold during the same period a year ago. Producers sold 164,900 tonnes of soybeans between 13 and 18 October, far below the 750,000 tonnes sold a year ago. A temporary soybean export boom in September has made comparisons difficult. After the government announced a preferential “soy dollar” exchange rate, soybean exports in September jumped to 13.3mil tonnes, far above the historical monthly average of 4.4mil tonnes.

• According to Reuters also, President Vladimir Putin has reserved Russia’s right to withdraw again from an international agreement allowing Ukraine to export grains via the Black Sea, after ending 4 days of non-cooperation with the deal. If Russia did so, however, Putin said it would not impede shipments of grains from Russia to Turkey. In a statement, Russia’s defence ministry said that with the help of the United Nations and Turkey, the country has obtained written guarantees from Ukraine that it would not use the secure shipping corridor or the designated Ukrainian ports for strikes against Russia.

• Bloomberg reported that Canada is assessing options to increase exports to Europe. These include strategic commodities typically produced in Russia and Belarus such as potassium and uranium. Canada is also looking at increasing liquefied natural gas exports by sending more to world markets.

Source: AmInvest Research - 7 Nov 2022