• Bloomberg quoted Poet LLC, which is the world’s biggest producer of corn ethanol, as saying that it could be forced to walk away from nascent sustainable aviation fuel (SAF) market if US policy freezes out the industry. Biofuel producers hoping to profit from increasing demand for green jet fuel are urging the Biden administration to help them take full advantage of tax credits in the Inflation Reduction Act. At issue is the disagreement over how to track emissions from SAF, which can be made from an array of materials, including ethanol.

• In a related development, Reuters reported that USA’s drive to develop SAF using ethanol could be slowed because of growing opposition to proposed pipelines that would curb greenhouse gas emissions from ethanol plants by capturing carbon dioxide and carrying it away to other states for storage. Ethanol industry players said that the developments raise questions about the future growth of US producers of biofuel including Poet LLC, which have been banking on proposed carbon capture and storage projects across the heartland. These are needed to lower ethanol’s climate impact enough for the fuel to qualify as feedstock for SAF under the Inflation Reduction Act.

• According to Bloomberg, US soybean export sales are the biggest since 2012 as crop problems in Brazil coincide with President Xi’s first meeting with US President Biden in more than a year. Hot and dry weather in Brazil means harvest could fall from earlier expectations. Exporters sold 3.9mil tonnes of US soybeans in the week ended 10 November, which was the largest weekly sales in 11 years. More US sales are likely as Brazil runs short on supplies ahead of the harvest next year.

• The RSPO (Roundtable for Sustainable Palm Oil) is working on a new certification, trade and traceability system in preparation for tighter global rules including the EU deforestation law. The RSPO has formed a consortium of global agricultural technology companies such as Agridence and CIED that will improve and digitalise the system. There will be a new digital platform to expand PalmTrace, which is the existing system. The new system can be a tool for smallholders to show compliance with EU’s deforestation law.

• Reuters cited the Rosario grains exchange as saying that Argentina’s agricultural core saw much higher than average rainfall in the first half of November and will likely see even more moisture over the coming days in a welcome boost for the sector. Recent rainfall in the past few weeks has provided a welcome boost to the start of soybean plantings for the 2023E/2024F harvesting season while also helping areas planted with corn for the same cycle though most corn plantings have yet to be sown.

• University of Cambridge reported that the UK soft drinks industry levy introduced in 2018 may have saved more than 5,500 hospital admissions for tooth extractions. Researchers at the Medical Research Council Epidemiology Unit at Cambridge found that the levy may have reduced the number of under-18s having a tooth removed due to tooth decay by 12%. The largest reductions were in children aged up to 9 years old. Sugar-sweetened drinks account for around 30% of added sugars in the diet of children aged 1-3 years old in the UK. In children aged 18 and under, there was a reduction in hospital admissions of 3.7 per 100,000 population per month compared to the situation if the soft drinks levy had not happened.

Source: AmInvest Research - 27 Nov 2023