• The USDA has released its monthly demand and supply projections. The USDA has reduced its 2023E/2024F US soybean inventory to 245mil from 300mil bushels. This was due to a downward revision in the soybean yield to 50.9 bushels from 52 bushels per acre. Comparing 2023E/2024F against 2022/2023E, US soybean production is expected to inch down to 4,205mil bushels in 2023E/2024F from 4,276mil bushels in 2022/2023E.

• In spite of lower US soybean inventory, global soybean stockpiles are envisaged to climb by 15.8% to 119.4mil tonnes in 2023E/2024F from 103.1mil tonnes in 2022/2023E. Soybean production in Brazil and Argentina is anticipated to rebound by 16.6% to 211mil tonnes in 2023E/2024F from 181mil tonnes in 2022/2023E on the back of better weather conditions.

• Bloomberg cited Cargill as saying that Satelligence will provide the company with near realtime monitoring of deforestation risk across its soybean, palm oil and cocoa supply chains. The cooperation will support Cargill’s goal to have deforestation-free supply chains by 2030F. Also, Indonesia has requested consultation with the World Trade Organisation (WTO) as it disputes EU’s countervailing duties on imports of biodiesel from the country. Indonesia claims that EU’s duties are inconsistent with WTO’s agreement on subsidies, countervailing measures and general agreement on tariffs and trade.

• Reuters reported that demand for palm oil has been increasing as its discount to soybean oil and sunflower oil has grown, driven by the recent price rise in rival oils and supply disruptions from the Black Sea region. India imported 1.1mil tonnes of palm oil in July, nearly 60% more than June and the highest in 7 months. An industry expert said that India’s imports would remain robust in August and September as well. Dealers said that CPO is offered at US$910/tonne including CIF to India for September delivery compared with US$1,050 for crude soybean oil and US$1,010 for crude sunflower oil.

• The Malay Mail cited the Sabah state government as saying that it has collected RM6.2bil in sales tax from the palm industry from 2018 to 2023E. A government official said that income from the sales tax on palm oil was among the biggest earners for the state at 22% of total revenue in 2022. In 2018, Sabah collected RM845.4mil followed by RM789.6mil in 2019, RM919.2mil in 2020, RM1.4bil in 2021 and RM1.6bil in 2022. As of July 2023, Sabah has collected RM739.5mil.

• Jakarta Globe reported that former Trade Minister Muhammad Lufti has undergone interrogation at the Attorney General’s Office (ATO) in Jakarta as a witness in the investigation into illegal exports of CPO. Prosecutors alleged that a Trade Ministry official, who issued the permits, had accepted bribes. The AGO has initiated a new phase of investigation by naming 3 companies – Wilmar Group, Permata Hijau group and Musim Mas group as “corporate suspects” in the case. Allegedly, the companies fraudulently obtained CPO export licenses from the Trade Ministry, resulting in an estimated loss of Rp6.5tril (US$425.7mil), according to ATO’s estimates.

Source: AmInvest Research - 21 Aug 2023