• Times of India reported that the Indian government has extended the facility of restriction-free imports of refined palm oil beyond 31 December 2022 until further notice. The move is aimed at increasing domestic supplies and bringing down cooking oil prices. In June 2021, the import restrictions on refined palm oil were removed until 31 December 2021. Subsequently, it was extended until 31 December 2022.

• According to Bloomberg, Indonesia will start B35 on 1 February. The percentage of biodiesel to be mixed with gasoil will remain at B30 in January. In another development, an official with the Indonesia Oil Palm Plantations Fund Management Agency said that the country’s palm oil exports will normalise to 36mil to 38mil tonnes in 2023F from an estimated 34.7mil tonnes in 2022. Also, Indonesia may start building “mini cooking oil factories” in 2023F to avoid the shortage situation in 2022. The country is seen collecting about Rph30trillion (US$1.9bil) from the palm oil levy in 2023F.

• According to Bloomberg, Malaysia said the EU’s regulation for deforestation-free products is a “deliberate” act to block market access and may exacerbate the global food crisis. The EU Parliament and member states agreed to set mandatory rules for companies selling palm oil, beef, timber, coffee, cocoa, rubber and soybean to ensure that those products do not come from deforested land. The RSPO said that tougher EU restrictions could have unintended consequences for farmers worldwide and disproportionately affect growers that can afford it the least. Plantation and Commodities Minister Fadillah Yusof said that the EU’s action will place additional burden on Malaysian palm oil exporters as they would need to provide additional traceability data.

• S&P Global Platts quoted industry experts as saying that China’s soybean imports are expected to recover in 2023F amid improved margins, rising demand in the animal feed sector and a need to replenish state reserves. However, the rising Covid-19 cases and the government’s approach to tackling the pandemic will introduce an element of uncertainty to this scenario. China’s imports of soybeans are forecast to grow 8.3% to 98mil tonnes in 2023F according to a survey of market participants at trading, crushing and brokerage companies. The increase in inflows is expected to be driven by demand to re-stock government reserves. Industry sources estimated that there will be a need to replenish stocks by as much as 7mil tonnes in 2023F after multiple rounds of auctions held by the state reserves in 2022.

• According to Biofuels International, the European Biodiesel Board has welcomed the European General Court’s decision to dismiss the action for annulment by 3 Indonesian biodiesel producers following the EU imposition of countervailing duties on biodiesel imports from Indonesia. After a 2-year litigation process, the EU General Court rejected all arguments brought forward by Indonesian exporters to justify their request to annul the countervailing duties imposed by the EU. Regarding the claim that the European Commission (EC) had failed to consider all relevant data to establish undercutting, the court confirmed that the Indonesian exporters had information that enabled them to understand the EC’s calculation and that the EC did not commit an error of assessment.

Source: AmInvest Research - 3 Jan 2023