• Indonesia Business Post reported that the Ministry of Energy and Mineral Resources has established a distribution quota of 13.4mil KL (11.7mil tonnes) for B35 in 2024F. The decision on the quota is based on the successful distribution of B35 throughout 2023, reaching 12.2mil KL (10.6mil tonnes). In a previous assessment, the Institute for Development of Economics and Finance (Indef) suggested a comprehensive re-evaluation of B35, which has been in effect since February 2023. An official with Indef urged the government to review subsidies and incentives in the context of declining CPO and solar prices globally.

• Bloomberg quoted Plantation and Commodities Minister Johari Abdul Ghani as saying that there are 420,000 hectares of rubber estates in Malaysia that cannot be tapped due to a labour shortage of 70,000 workers. He said that one worker is needed for 1.5 ha of rubber estates. He has raised the issue to the cabinet so that the human resources and home ministries can look into the issue.

• Jakarta Globe reported that Indonesia is betting big on winning its lawsuit against the European Union’s biofuel restrictions and insists that it would not derail their long-awaited trade pact. The optimism stems from strong arguments against ILUC concerns and potential economic implications for the EU. While optimistic about palm oil, Indonesia is still appealing a 2023 WTO ruling favouring the EU on its ban on unprocessed nickel exports. Despite ongoing legal tensions, both sides are committed to finalising the Comprehensive Economic Partnership Agreement by 2024F.

• According to the Guardian UK, a report by MPs has found out that UK consumption is having an “unsustainable” impact on the world and contributing highly to deforestation. Products such as soya, cocoa, palm oil, beef and leather may be products of deforestation and the environmental audit committee has found that the UK’s deforestation footprint per tonne of product consumed is higher than that of other countries including China. MPs in the environmental audit committee are calling for ministers to develop a target to reduce the UK’s impact on global deforestation as well as a Global Footprint Indicator to demonstrate the impact to the public.

• Reuters cited grain exporters group, Anec as saying that Brazilian soy exports will reach at least 1.3mil tonnes in January based on shipping schedules. If confirmed, the volume would represent an increase from the 940,000 tonnes exported in the same month a year ago, even though dry weather delayed some planting and will affect the pace of harvesting of the 2023/2024F soybean crop. Anec said that shipping schedules indicate as much as 2.7mil tonnes of soybean exports for January. However, there might not be enough production to meet volumes projected in shipping schedules before the 2023/2024F crop is ready, hence the conservative estimate of 1.3mil tonnes.

• Reuters quoted a trade ministry official as saying that Indonesia recorded domestic sales obligation realisation of 3.3mil tonnes in 2023, which translated into 25.2mil tonnes in export permits. Of the total permits issued, 6.2mil tonnes of exports have not been realised. Indonesia issues shipment permits to companies when they have sold a portion of their products to the domestic market.

Source: AmInvest Research - 15 Jan 2024