• Soybean price rose last week as concerns over a drought in the US emerged again. According to a US weather expert quoted by Bloomberg, moderate drought conditions and abnormally dry soil will expand across the US Midwest in the next two weeks. This may reduce soybean yields further. Currently, the USDA is forecasting US soybean production to rise by 1.7% to 4,381mil bushels in 2017F/2018F. Soybean yield is estimated at 49.4 bushels per acre in 2017F/2018F vs. 52.1 bushels per acre in 2016/2017F.

• Reuters reported that Mars Inc is aiming to cut greenhouse gas emissions and address sustainability issues across its supply chain. Mars plans to spend US$1bil to expand its sustainability goals beyond previously announced targets to cut its own greenhouse gas emissions by 40% by year 2020. By year 2050, Mars plans to reduce greenhouse gas emissions in its supply chain by 67%. Mars has been sequencing genomes for crops like cocoa to make the plants more productive and having conversations with suppliers on the transition to renewable energy.

• According to Le News, two Swiss NGOs have started a petition calling for Swiss retailers to reduce or remove palm oil from their products. In response, an NGO called The Forest Trust reckons that while palm oil has many serious negative issues, palm oil is not the only one facing these problems. In addition, palm oil has generated huge levels of economic development for people.

• Jakarta Post said that the Indonesia government is seeking support from the United Nations Development Programme for its ISPO (Indonesia Sustainable Palm Oil) standards. The Indonesian Palm Oil Producers Association (GAPKI) has said that the ISPO certification has not brought any benefit to companies joining the programme because the standards lack international recognition. As of last month, 304 out of a total of 1,200 companies have received the ISPO certification.

• Reuters reported that Indonesia has failed to overturn a ruling in a trade dispute with the European Union (EU) over fatty alcohols. The appeal judges of WTO upheld a ruling from December 2016, which said that the EU was within its rights to impose anti-dumping duties on Indonesian fatty alcohols. The EU said that fatty alcohols exported by PT Musim Mas were sold below their cost price.

• Agriculture.com quoted a government agency as saying that corn planted areas in Brazil are expected to fall by 2% to 5% in 2017F/2018F. CONAB said that based on the parameters of the cost of production with the vegetable prices, corn is only paying for the cost of the crop while soybean is giving a good return of profitability even though soybean prices are lower than last year.

• SGS said that Malaysia's palm oil shipments edged down by 0.1% in August compared with July. On the other hand, Intertek reported that Malaysia's palm exports rose by 0.32% MoM in August. According to SGS, palm shipments to the EU fell by 29.6% in August compared with July while exports to China declined by 3.4%. Intertek said that RBD palm olein accounted for 35.6% of Malaysia's palm shipments in August and "others" made up another 20.6%. We believe that the "others" category includes products like biodiesel.

Source: AmInvest Research - 11 Sept 2017