• The USDA (US Department of Agriculture) has released its monthly demand and supply projections for vegetable oils. The USDA has raised its estimate of 2023/2024F US soybean inventory by 14.3% to 280mil bushels due to higher production. Comparing 2023/2024F against 2022/2023, however, US soybean production is forecast to ease by 2.5% to 4,165mil bushels from 4,270mil bushels dragged by a 4.5% drop in planted areas.

• The USDA expects world soybean inventory to increase by 12.5% to 114.6mil tonnes in 2023/2024F from 101.9mil tonnes in 2022/2023. The rise in soybean stocks in 2023/2024F can be attributed to a 2-fold climb in Argentine soybean production. Global soybean output is envisaged to expand by 6.3% to 399mil tonnes in 2023/2024F from 375.4mil tonnes in 2022/2023.

• Bloomberg quoted an official with the MPOB (Malaysian Palm Oil Board) as saying that Malaysia’s CPO production is projected at 18.8mil tonnes in 2024F vs. 18.6mil tonnes in 2023. CPO prices are forecast to range between RM3,900/tonne and RM4,200/tonne in 2024F. The implementation of B35 in Indonesia will limit global supply for the exports market. Total planted areas in Malaysia shrank to 5.65mil ha in 2023 from 5.67mil ha in 2022.

• Reuters reported that in 2023, Indonesia approved the replanting of 53,012ha of palm oil trees on land owned by smallholders under a subsidised programme. The size of replanting increased from 30,759ha in 2022 but still fell below Indonesia’s annual target. Indonesia has a target of replanting 180,000ha of palm oil trees on smallholders’ land every year. The smallholders palm replanting scheme was launched in 2016 and initially targeted replacing around 2.5mil ha of old trees by 2025F. However, only 326,308ha have been approved by end- 2023 and only 205,524ha have been planted.

• With reference to news reports that Wilmar International’s China unit is involved in a palm oil fraud, the group said that it has zero tolerance for corrupt practices and does not condone any corrupt act by its employees. Yihai Kerry Arawana Holdings disagrees with the charges and will actively defend its rights to protect the legal interests of the company and its shareholders.

• Bloomberg cited a government minister as saying that Indonesia is estimated to consume 12.5mil kilolitres (10.9mil tonnes) of biodiesel in 2024F. The country consumed 12.2mil kilolitres (10.6mil tonnes) of biodiesel in 2023. Subsidised biodiesel quota is set at 13.4mil kilolitres (11.7mil tonnes) in 2024F. The government is looking into funding options to raise the biodiesel blend to 40%.

Source: AmInvest Research - 22 Jan 2024