• Reuters reported that despite economic concerns, China’s agricultural demand is expected to remain strong this year, particularly when it comes to imports of bulk commodities like soybeans, corn and other grains. Brazil has been increasingly capturing that business at the expense of US exporters. Chinese customs data showed a huge surge in Brazilian soybean arrivals in January and February despite a 5-year low for imports in those months. Brazil’s soybean crops in the last few years have grown at double the rate of Chinese soybean consumption, meaning the country can be more of a full-year supplier than previously.

• Reuters cited an industry expert as saying that a new front of heavy rains in the key grain regions of Argentina could be “very damaging” to the country’s soy and corn crops. Argentina saw strong rains above normal levels in March, which boosted dry soils initially but is now starting to saturate the farmland. The Rosario Exchange estimates the soybean harvest at 50mil tonnes and corn at 57mil tonnes. But recent rains put those numbers at risk.

• Bloomberg quoted a government official as saying that Indonesia is mulling to revise the domestic market obligation (DMO) policy for cooking oil by linking it to production instead of exports. The policy is seen as vulnerable when export demand slows down. Linking the DMO to production will prevent any impact from the global market forces of demand and supply. Another government official said that DMO cooking oil supply volume has been declining since August. Average domestic cooking oil supply is 271,134 tonnes per month vs. the target of 300,000 tonnes/month.

• Bloomberg quoted a government official as saying that Indonesia replanted 327,000ha of oil palm plantations through early-2024F. Another official said that about IDR9.3tril (US$585.6mil) of funds generated from the export levy has been used for replanting. The government will double replanting aid for smallholders to IDR60mil (US$3,778) per ha in May 2024 to boost replanting.

• The Guardian reported that the EU is set to impose a tariff of up to 50% on Russian grain imports amid fears that the Kremlin would flood the bloc with cheap wheat to destabilise the European market. Russian grain has low or no customs duties when sold in the EU, but the proposal would lead to the imposition of a tariff of up to €95/tonne of grain, which currently sells for up to €220/tonne depending on the quality of the wheat. Russian grain exports to the EU have gone up from 960,000 tonnes in 2022 to 1.5mil tonnes in 2023 while at the same time, production has rocketed from 35mil to 50mil tonnes from 2022 to 2023, EU officials said.

Source: AmInvest Research - 1 Apr 2024