• Bloomberg cited Media Indonesia as saying that the government plans to require exporters of natural resources to repatriate and hold their forex earnings onshore from July onwards. The ruling will apply to those with export proceeds of at least US$25,000.

• According to Bloomberg also, a surge in sugar prices has driven buyers to delay international purchases and tap local inventories, further pressuring global stockpiles that are the lowest in a decade. According to an industry player, buyers in Africa and Middle East are postponing orders and will be drawing from inventories as a result of the inverted curve. Also, transportation bottlenecks may limit deliveries from Brazil. The Brazilian transportation system is overwhelmed by a record soybean crop that is threatening logjams for sugar deliveries. In addition, rising oil prices have raised fears that sugar cane may be diverted to ethanol production.

• Reuters reported that China’s agriculture ministry has issued a 3-year action plan to reduce soymeal use in animal feed as it tries to reduce heavy reliance on soybean imports. The new plan proposes soymeal ratio in animal feed to be reduced to less than 13% by 2025F from 14.5% in 2022. According to an industry expert, China could be reducing soymeal consumption by at least 3mil tonnes a year, which is equivalent to 4mil tonnes of soybeans. Imports could drop to 82mil tonnes by 2025F with feed makers using more rapeseed, sunflower seeds and synthetic protein as soymeal substitutes. Lower soybean imports could result in less soybean oil production, which would require more palm oil imports as compensation.

• Also, Reuters said that Brazilian farmers will produce a record 153.6mil tonnes of soybeans this season, an increase of 2.2mil tonnes compared to an earlier forecast in March. According to Conab, farmers will harvest an average of 3,527kg of soybeans per hectare. The farmers planted the largest area in history in 2022/2023F and are expected to achieve record yields and production. Conab added that corn production in Brazil will reach a historic high of 124.9mil tonnes even though some farmers were forced to plant their second corn outside the ideal climate window because of delays in the soybean harvest.

• Bunge announced that it will be acquiring a newly constructed, port-based refinery in Louisiana, on the Mississippi River from Fuji Oil New Orleans. The transaction is being conducted via Bunge Loders Croklaan BV. The refinery’s operations are expected to commence in 2Q2023. Bunge plans to expand the facility’s capacity in the future. The capacity will be available for all of Bunge’s food, feed and fuel customers.

Source: AmInvest Research - 25 Apr 2023