• Bloomberg quoted the Ukrainian Agriculture Ministry as saying that the country’s grains harvest was 35.6mil tonnes as at 13 October for the season that started on 1 July. A jump in the second week in a row came largely from a bumper corn harvest, which was already 5mil tonnes vs. 1mil tonnes a year ago. Sunflower seed harvest increased to 9mil tonnes, which was double the same period a year ago.

• Bloomberg also cited Malaysia’s finance ministry reports as saying that the country’s palm production would increase in 2024F as labour conditions return to pre-pandemic levels and El Nino’s impact is minimal. Tax export duty collection from crude palm oil is forecast at RM772mil in 2024F compared with RM719mil in 2023E. Collection from windfall profit levy is estimated to be RM1bil in 2024F vs. RM922mil in 2023E.

• Reuters reported that India will maintain the floor price for basmati rice exports until further notice as the country continues to curb overseas shipments of rice. India imposed a minimum export price of US$1,200/tonne on basmati rice in August to calm local prices ahead of state elections. India has banned exports of non-basmati white rice and imposed a 0% export duty on parboiled rice.

• According to Reuters also, Garuda Indonesia has completed a test flight using palm blended jet fuel on a Boeing 737-800NG aircraft. The plane flew more than 130km from Jakarta to Pelabuhan Radu in the southern part of Java in an hour return flight using jet fuel containing 2.4% palm content. The palm blended jet fuel was produced by PT Pertamina at its Cilacap refinery, using hydro processed esters and fatty acid technology and is made of RBD palm kernel oil.

• Bloomberg reported that Chinese soybean crushing margins have reached the lowest level since early-June, an early sign of potentially weaker demand in the months ahead. According to an industry expert, China’s soybean importers took advantage of a bumper crop in Brazil to boost processing in the past several months. Now the industry is faced with ample soymeal supplies as demand from hog partners is weak.

• NST said that the Malaysian Palm Oil Association (MPOA) is disappointed that Budget 2024 has omitted 2 critical requests, which would have acted as enablers for the industry. One request was for a comprehensive review of the windfall profit levy and the other was for tax incentives for replanting of ageing oil palm trees. The association had asked for the levy tax rate for Sabah and Sarawak to revert to 1.5% from 3% as well as raise the threshold price level by RM500/tonne. MPOA said that the RM100mil replanting incentive for smallholders would only translate into replanting of 5,000ha to 6,000ha of oil palm hectarage or 0.9% of old trees.

Source: AmInvest Research - 23 Oct 2023