• Reuters cited Malaysia’s Ministry of International Trade and Industry (Miti) as saying that Beijing’s anti-dumping duty on US sorghum could open an opportunity for Malaysia to sell palm kernel cake to China as animal feed. Sorghum imports in China fell by 21% in March while demand for barley rose after China said in early February that it would investigate US dumping of sorghum. We are neutral on this development. We believe that palm kernel cake would not be able to completely replace sorghum or soybean as animal feed in China as it lacks certain nutrients such as protein.

• Bloomberg reported that bids for US sorghum at the Gulf of Mexico have almost disappeared after China’s decision to impose a 179% tariff. A US grains handler said that with the tariffs, sorghum prices relative to corn must drop to attract domestic and international customers. China was the biggest importer of US sorghum. Sorghum is fed to livestock and poultry and is used to make ethanol.

• UK’s Express newspaper said that hundreds of British jobs have been put in jeopardy by the EU’s proposed ban on palm biodiesel. Airbus was positioned to win a contract with Indonesia worth up to £1.5bil but the deal has hit roadblocks. Indonesia’s enterprises minister said that no trade talks with any European nation would take place until the threat of the palm oil ban has been lifted. Airbus has two major factories near Bristol and Chester, which employ a total of 13,000 people.

• The News of Pakistan reported that the Pakistani government is mulling imposing higher duties on edible oil imports to shed more than US$2bil of import bill. The government plans to restrict palm oil imports through tariff and non-tariff barriers. Imposition of regulatory duties is an option. The government may also consider introducing non-tariff barriers like stricter sanitary regulations. A formal announcement may come during the tabling of the 2018F/2019F budget.

• According to the Atlanta Journal Constitution, Enjoy Life Foods, which is a unit of Mondelez has become the first food company in the USA to receive palm oil-free certification for its latest products, from the International Palm Oil Free Certification Accreditation Programme (POFCAP). The brand’s new Grain and Seed Bars are the first to receive the certification. The Protein Bites product will receive its certification in June. POFCAP is the first international palm oil-free certification trademark and certification programme. POFCAP was launched in 2017 in Australia. POFCAP has approvals in the USA, UK, Spain, Austria and Sweden. It has applications pending in nine other countries.

• SGS said that Malaysia’s palm shipments slid by 2.5% in the first 25 days of April compared with the same period in March. The drop in shipments was mainly due to a 36.2% fall in palm exports to India. This was partly compensated by a 18.0% rise in shipments to China.

Source: AmInvest Research - 30 Apr 2018