• Global Construction Review said that a consortium led by China Communications Construction Company began work a few weeks ago to build a port in the northeast Brazilian state of Maranhao to boost the country's ability to handle soybean exports. The main role of the port is to handle agricultural exports including some of the 54mil tonnes of soybeans that China buys from Brazil each year. The port will have enough capacity to handle about 10mil tonnes of cargo a year, of which seven million will be soybean and corn and 1.5mil tonnes will be fertiliser. The volume of soybean exports may undergo explosive growth if China imposes a tariff on US soybean imports in retaliation for the USA's imposition of import duties on steel and aluminium products.

• In a related development, UK Agro Consult reported that Brazilian soybean farmers in Mato Grosso are looking to increase their market share in Asia by signing a partnership with the Panama Canal Authorities a few weeks ago. The partnership will enable soybeans produced in Mato Grosso, which accounts for 30% of Brazil's soybeans, to reach Asia quicker than the traditional route, which sees cargoes heading past the Cape of Good Hope. An industry expert said that increasing Brazil's soybean volume through the Panama Canal will cut the journey time to Asia by two to four days.

• Reuters cited experts as saying that the EU's proposal to impose import duties on modest US corn imports would not cause major pain for European importers or American exporters. But it could leave EU importers facing stronger competition as they look for alternative supplies in coming months due to heavy buying from China. The European Commission has called for industry views on a list of US products, which it could impose a 25% tariff, including corn as part of measures to respond to the USA's plan to impose tariffs on EU's steel and aluminium products. The EU imported 368,000 tonnes of corn from the USA from July 2017 to mid-March 2018. The USA accounted for 3.1% of EU's total corn imports.

• Reuters said that in spite of the country's push to reduce corn acreage, China's farmers are expected to plant more corn this year due to higher prices. Corn plantings have fallen in the past two years while soybean acreage has risen as China aims to reduce nearly 200mil tonnes of corn stocks in its reserves. The change in plantings threatens the Chinese government's five-year plan aimed at reducing corn acreage by 12.5% from 572mil mu to 500mil mu by year 2020F. A mu is the Chinese measure of land equivalent to fifteenth of a hectare.

• Bloomberg reported Greenpeace as saying that several major household brands including Hershey and Johnson & Johnson have failed to disclose where they get their palm oil from despite vows to stop buying from companies that cut down tropical forests to grow palm oil. Greenpeace added that international consumer goods companies are way off track in meeting a 2010 commitment to remove deforestation-linked palm oil from their supply chain by year 2020F. Greenpeace said that Indonesia, which has overtaken Brazil as the country cutting down forests at the fastest rate, lost 24mil hectares of rainforest between 1990 and 2015.

• SGS said that Malaysia's palm oil shipments rose by 13.6% in the first 20 days of March compared with the same period in February. Palm shipments to China surged by 83.7% while demand from India climbed by 10.5%. These helped compensate for a 12.7% drop in palm exports to the EU.

Source: AmInvest Research - 26 Mar 2018