• Bloomberg cited COFCO as saying that China's soybean imports may reach 100mil tonnes in 2017F/2018F. The growth in soybean imports is expected to be driven by the need to replenish reserves after the recent state auctions of soybean and rapeseed. Feed mills are also anticipated to build up inventories ahead of the holiday season as their stockpiles are low.

• It was also reported that the holding company of Indonesia's state-owned plantation operations wouldbe keeping its target of CPO production for 2018F similar to 2017F. There is no production growth in 2018F as Perkebunan Nusantara III will be replanting ageing oil palm trees. The group produced 1.9mil tonnes of CPO in 10M2017.

• Reuters said that China's crackdown on genetically modified (GMO) soybean imports this winter had boosted soy meal prices and improved crushers' margins. Crushing margins turned positive in August 2017 after months of being in the red. The glut in soy meal had declined due to strong demand from the livestock industry. This was partly because Beijing has been taking longer than expected to issue safety certificates for cargoes of GMO soybeans.

• According to Bloomberg, Indonesia has asked the US government to reconsider the anti-dumping duties on biodiesel as this is over-protectionism. The United States International Trade Commission is investigating whether Indonesia's biodiesel exports have harmed the US biodiesel industry. The commission will make its decision on 1 December 2017. If the decision is inconsistent with the WTO's Subsidy and Countervailing Measures Agreement, a government official said that Indonesia will evaluate all products imported from the US. The US has proposed anti-dumping duties of 34.45% to 64.73% on biodiesel imports from Indonesia.

• www.agriculture.com reported that Brazilian farmers are no longer behind in their soybean plantings. As at 17 November 2017, the farmers have planted 73% of the soybean areas. The improvement in rainfall has allowed soybean plantings to be expedited. A weather expert in Brazil said that the second half of November and the whole month of December will experience regular rainfall.

• According to Reuters, the USDA has forecast that world sugar production would reach 185mil tonnes in 2017F/2018F while consumption is expected to rise to 174mil tonnes. The record production of sugar is due to a record harvest of 40.2mil tonnes in Brazil in 2017F/2018F, up 1.1mil tonnes from the previous year. Also boosting global output are recoveries in India and Thailand and the abolishment of sugar production quotas in the European Union. We believe that the oversupply of sugar would exert downward pressure on sugar prices. This is expected to benefit MSM Malaysia, which imports raw sugar as its feedstock.

• SGS and Intertek said that Malaysia's palm shipments fell by 8.8% and 6.25% respectively in the first 20 days of November compared with the same period in October. SGS reported that Malaysia's palm exports to the EU dropped by 29.7% while China's palm imports declined by 8.3%. According to Intertek, RBD palm olein accounted for 42.8% of Malaysia's palm shipments while crude palm oil made up another 14%.

Source: AmInvest Research - 27 Nov 2017