• Bloomberg cited Poland’s public radio as saying that the European Commission is “seriously considering” subsidising the transport of Ukrainian grains through its member states after several countries banned imports. The issue of supporting the cost of transiting Ukrainian grain is being discussed at meetings of representatives from Poland, Hungary, Slovakia, Romania and Bulgaria together with the EU’s executive arm and Ukraine. The estimated cost of subsidies may be around 30 Euros per tonne.

• According to Bloomberg also, Cargill Inc has agreed to buy plants and storage sites from Brazilian biodiesel producer, Granol Industria Comercio e Exportacao SA to expand its soybean operations in the country. Cargill will gain 3 soybean processing plants and 4 storage facilities in the deal with Granol. Granol is Brazil’s largest producer of biodiesel.

• S&P Global Platts reported that abundant soybean supply and deteriorating domestic crushing margins are forcing Brazilian exporters to offer December shipments to China, triggering stiff competition with new crops from USA. Brazilian farmers have been holding to old crops and December offers have been priced at par with US Gulf Coast soybeans, potentially undercutting some US supplies at a time when China almost exclusively buys from US. Record production of corn and soybeans in Brazil has weighed on supply chains and operations at grain terminals, leading to severe port congestions and key export terminals at Santos.

• Reuters reported that China’s soybean imports from US tumbled by 62% YoY in July while shipments from Brazil surged by 62%. China imported 142,129 tonnes of soybeans from US in July, down from 377,192 tonnes a year earlier. In spite of this, US remained as China’s second largest soybean supplier, accounting for 31.9% of China’s soybean imports in 7M2023. From January to July 2023, soybean shipments from US rose by 13.9% YoY to 19.9mil tonnes.

• TodayOnline quoted China’s state media as saying that the Ministry of Finance has arranged for a one-time subsidy fund of CNY2.4bil (US$329.7mil) for fertiliser and pesticides for corn and soybeans grown in the north of the country. The funds will support the use of crop chemicals to boost resistance and reduce losses in the country’s autumn crops. China’s north and northeast regions were inundated with heavy rains and flooding in recent weeks, raising concerns of high levels of pests and damage to grains output.

• Financial Times cited the head of the multilateral International Trade Centre (ITC) as saying that EU rules to curb deforestation could have a “catastrophic” impact on global trade if the bloc does not help small producers and developing nations. An official with ITC said that exporters from countries such as Brazil or Honduras, which are main suppliers of coffee or key palm oil and rubber exporters such as Indonesia and Malaysia could try to sidestep the regulation by sending goods to countries with less stringent import rules.

Source: AmInvest Research - 28 Aug 2023