• Reuters reported that Indonesia’s president has asked the government to create a mechanism next year to ensure the rollout of B35 biodiesel. Indonesia’s Chief Economics Minister said that the implementation of B35 will reduce the country’s dependency on oil imports. He did not provide further details on the implementation or timeline for B35.

• Associated Press reported that deforestation in the Amazon slowed slightly last year. According to the National Institute for Space Research, the Amazon lost an area, roughly the size of Qatar or 11,600 sq km, from August 2021 to July 2022. This was 11% smaller than the previous year, when over 13,000 sq km were destroyed. This will be the last report under former President Bolsonaro. Part of the destruction that took place under his term will not appear until next year including the key months from August 2021 to October 2022. A different satellite system showed that deforestation skyrocketed 45% during the August to October period. Traditionally, that time of the year sees peak destruction due to the dry season.

• Reuters reported that Argentina has raised the price of biodiesel for domestic consumption, keeping the price just below the current high inflation rate. The Ministry of Economy’s energy secretariat retroactively set a value of 242,000 Pesos (US$1,449) per tonne sold from 15-30 November from 220,000 Pesos per tonne previously. The value of the biodiesel will be adjusted in subsequent months by 4% per month in line with price guidelines. After the adjustments, the price of biodiesel will reach 283,106 Pesos per tonne in March 2022.

• Bloomberg reported that Godrej Industries, part of a 125-year old Indian conglomerate, is looking to boost the number of oil palm plantations as the government aims to raise local output and cut imports. The group’s agriculture and chemicals arm, Godrej Agrovet, will more than double the acreage of oil palm trees under management over the next 6 years. Godrej is bolstering its position after Prime Minister Modi announced that the country will spend US$1.4bil to help farmers produce more palm oil. India plans to increase the palm area by almost 3x to 1mil hectares by 2025F.

• According to Bloomberg, Nutrien is warning of global shortages ahead with supplies from Russia and Belarus becoming more limited than anticipated. Russia and Belarus, which are 2 of the world’s biggest producers of potash, are exporting less due to trade restrictions and the Ukraine war. Nutrien sees shipments from Belarus to be at least half of those in 2021 while Russia’s exports could be down as much as 25%. On the other hand, Nutrien said that it will ramp up potash output to 18mil tonnes by 2025F, a 40% increase compared to 2020. Also, Nutrien is seeing prepaid sales of fertiliser to be 15% to 20% higher than 2020. Farmers, who did not buy this year and have used all of their potash, will jump into the market and send prices higher.

Source: AmInvest Research - 12 Dec 2022