• Bloomberg cited a report from China’s National Development and Reform Commission as saying that the country vowed to make progress on raising grain production capacity by 50mil tonnes over the next 7 years. The expansion aims to meet rising grain demand and ensure food security by boosting capacity of soybeans and other oilseeds. The government is targeting grain production above 650mil tonnes in 2024F compared with 695.4mil tonnes in 2023.

• Reuters reported that China’s Jan-Feb soybean imports fell to a 5-year low. Customs data reported that China imported 13mil tonnes of soybeans in 2M2024, which were 8.8% lower YoY. The imports were the lowest for the period since 2019, according to Reuters data. China’s soybean demand for livestock feed may be hit this year by controls implemented to rein in the production of pigs after an aggressive expansion of farms led to oversupply and losses. China reduced the national target for the normal retention of breeding sows to 39mil from 41mil, which could lower the size of pig herds by at least 22mil.

• The Star reported that the Plantation and Commodities Ministry will work with the Domestic Trade and Consumer Affairs Ministry to take action against product-importing companies that discriminate against palm oil. Every imported product that has signs of discriminating against palm oil products will be fined as much as RM250,000 in line with Section 69 of the Trade Description Act 2011. Also, the ministry will discuss with the Islamic Development Department Malaysia to put the MSPO logo on every palm oil-based product in the country.

• According to Reuters, Japan will reduce the rate at which it sells imported wheat to domestic flour mills from April by an average 0.6% to reflect softer import prices. This is the government’s 2nd consecutive drop in prices, reflecting weaker international wheat prices. Japan buys 5 types of milling wheat from USA, Canada and Australia through import tenders and sells to domestic millers at prices set twice a year.

• Reuters also cited the Vietnam Food Association as saying that the country’s rice exports are estimated at 6.5 to 7mil tonnes this year, down from last year’s record of 8.1mil tonnes. Vietnam has earlier flagged that it would gradually cut its export volumes to focus on high quality and high-priced rice while also adapting to climate change and ensuring domestic food security. Exports in the year to mid-February rose 14.4% YoY to 663,000 tonnes. Demand from Indonesia, Malaysia, Philippines, China and Africa has been increasing as El Nino is expected to last until mid-2024F.

Source: AmInvest Research - 18 Mar 2024