• Bloomberg reported that China is stockpiling locally grown soybeans to boost farmer incomes and encourage them to plant more. Sinograin is stepping up purchases to bolster prices after they dropped sharply in some of the main northeastern growing areas. Prices fell because of a larger domestic crop, weak demand and the impact of Covid-19.

• In a related development, Yicai Global said that Sinograin is offering a higher price for the surplus from soybean harvest last year and waiving requirements for protein content to ensure farmers’ income and encourage them to plant more this year. Sinograin has increased its offer price for soybean by CNY0.05/kg to CNY2.78/kg. It is launching the scheme in northeastern Heilongjiang and inner Mongolia Autonomous Region.

• Bloomberg quoted China’s agriculture ministry as saying that corn consumption in the country remains weak because of poor livestock margins with processors only buying handto-mouth. However, the country’s demand for main agricultural commodities such as soybean is improving as the economy recovers. Corn supplies are rising with farmers selling more grains as warm weather makes storage harder.

• Also, Indonesia’s trade minister Zulkifli Hasan said that palm oil exporters distributed 360,150 tonnes of cooking oil to the local market to fulfil their domestic market obligations in February, a 6% increase compared to January. So far in March, DMO realisation stood at 96,384 tonnes. The government is pushing for DMO realisation to reach 450,000 tonnes this month.

• Reuters reported that PepsiCo Inc and FrieslandCampina, which is a Dutch dairy producer have asked their suppliers to cease buying palm oil from Astra Agro Lestari. Last year, environmental groups found that Astra Agro Lestari did not obtain consent from local communities before claiming land, improperly disposing waste and clearing areas leading to floods in Indonesia. Astra Agro said that it would appoint “an independent third party to review the allegations and any other issue that may arise in relation to them”.

• DTN/Progressive Farmer reported that retail prices of fertiliser continued to move lower in the last week of February. The downward trend has been in place in the past couple of months. Leading the price decline was urea ammonium nitrate (UAN). UAN28 was 14% lower compared to the previous month and had an average price of US$444/tonne (RM2,007/tonne). Potash was 5% lower compared to the previous month with an averageprice of US$666/tonne (RM3,010/tonne). All fertilisers are now less expensive compared to last year. Potash costs has decreased by 28% and urea 27%.

Source: AmInvest Research - 20 Mar 2023