• Bloomberg reported that an agreement that allows Ukraine to export grains and other crops from key Black Sea ports has been renewed although uncertainty surrounds the duration of the extension. While a Ukrainian official said that the pact has been prolonged for another 120 days, a Russian spokeswoman said that Moscow only agreed to a 60-day extension. A Turkish official said that extension was for 60 days. The Black Sea Grains initiative has enabled more than 25mil tonnes of crop shipments from Ukraine since it was first brokered by the UN and Turkey in July 2022.

• According to Bloomberg also, the % of mandatory blending of biodiesel with diesel oil in Brazil will increase to 12% in April from 10%. The blend will be raised to 13% in 2024F and 14% in 2025F. In Malaysia, B20 in the transportation sector will be implemented in phases. Minister of Plantation and Commodities Fadillah Yusof said that the nationwide roll-out will depend on the availability of biofuel blending infrastructure in the country.

• The Financial Times said that the UK government may remove import tariffs on Malaysian palm oil as part of negotiations to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Under CPTPP, UK will have to cut palm oil tariffs to nil from up to 12% currently. The UK had envisaged a multi-year phasing out of the tariffs, which was opposed by Malaysia.

• Reuters reported that Malaysian palm oil and rubber smallholders have filed a petition to the EU to protest against a new law preventing imports linked to deforestation. A group of 6 smallholder associations said that the regulation’s unilateral and unrealistic demands on traceability and geo-location will prevent small farmers from accessing the European market. Malaysia plans to spend RM10mil to counter what they call an anti-palm oil campaign.

• S&P Global Platts reported that China soybean prices plunged 2 weeks ago, with the basis to CBOT futures reaching the lowest levels since 2018 amid higher selling volume by Brazilian farmers and lower demand coverage for nearby shipments. According to market sources, the weekly selling volume of soybeans in Brazil is expected to amount to 6 to 7mil tonnes, which would be the highest since January 2023. At the same time, China’s soybean demand is weakening due to softer consumption and a lack of recovery in the hog breeding industry.

• According to Nikkei Asia, Thailand will be re-starting a potash mining project that has been dormant for decades. The US$1.8bil project aims to ease shortages of chemical fertilisers and reduce prices domestically. The previously dormant entity, ASEAN Potash Chaiyaphum Public Co, plans to operate a potash mine n Chaiyaphum, 367km north-east of Bangkok. TRC Construction, which is listed on the Stock Exchange of Thailand, will be the largest shareholder in the project, with a 25.1% stake.

Source: AmInvest Research - 27 Mar 2023