• Bloomberg reported that Cargill Inc is expanding its commitment to buy deforestation-free crops in South America, including supplies purchased from other merchants and traders. Cargill will not buy major crops from deforested areas in Brazil, Argentina and Uruguay from 2025F. The pledge includes supplies from 3rd parties, which are the hardest to trace. Cargill will be working with the World Resources Institute for monitoring and verification.

• Reuters reported that WTO’s (World Trade Organisation) dispute settlement body has agreed to establish a panel to review countervailing duties imposed by EU on imports of biodiesel from Indonesia. Indonesia has requested WTO dispute consultations with EU regarding the bloc’s imposition of duties on imports of biodiesel from the country in August. The countervailing duties were imposed for 5 years from 10 December 2019 to 10 December 2024. The WTO said that USA, United Kingdom, Norway, Russian Federation, Thailand, Singapore, Japan, Canada, China, Argentina and Turkiye had reserved 3rd party rights to participate in the panel proceedings.

• Biomass Magazine cited data from US Energy Information Administration as showing total US operable biofuels production capacity fell slightly in September. Feedstock consumption was down slightly from August but up significantly from September 2022. Operable biofuels production capacity was 23.5bil gallons per year (gpy) in September, down 8mil gpy compared to 23.5bil gpy in August. Biodiesel plants consumed 620mil pounds of soybean oil in September, up from 618mil pounds in the previous month and 596mil pounds a year ago.

• Reuters reported that Asian off-season rice production is poised to take a hit as dry planting conditions, shrinking reservoirs and forecasts for continued El Nino are set to reduce 2024F yields. India and Thailand are expected to see declines in production from off-season crops in 1Q2024 while Indonesia is still reeling from drought as farmers plant their crops. Indonesia and the Philippines are securing supplies. The Philippines has given private traders a month to buy an additional 1mil tonnes of rice to boost local supply and keep prices in check. Indonesia’s state food procurement agency, Bulog has secured contracts for 1mil tonnes of rice imports.

• In a related development, The Nation of Thailand said that the country’s rice exports increased by 11.4% to 6.9mil tonnes with a total value of THB136.3bil in 10M2023. Previously ranging from THB8,000/tonne-THB9,500/tonne, rice prices are now peaking at THB12,000/tonne, the highest in 17 years. Enquiries with rice mills reveal that the increase is linked to elevated prices of Vietnamese rice, which are US$70-US$90/tonne higher than Thai rice due to insufficient production in the country. Rice mills in Thailand are actively procuring rice from farmers for pre-ordered rice as they anticipate a continued upward trend in rice prices.

Source: AmInvest Research - 11 Dec 2023