• Bloomberg reported that India is considering raising duties on soybean, sunflower and mustard oils so that there is parity in import taxes with those of palm oil. The government will make a decision on the tariffs soon. The Solvent Extractors Association of India is seeking a 40% import duty on soybean, sunflower and mustard oils. Currently, import duties are 30% on soybean oil, 44% on crude palm oil and 25% each on sunflower and mustard oils.

• Reuters reported that Paraguay is forecast to export more soybeans than Argentina for the first time this year. Farmers in Paraguay are increasing soybean output to fill the supply gap left by Argentina due to the drought. Paraguay’s soybean exports are expected to be 6.3mil tonnes this year according to the USDA (US Department of Agriculture) compared with Argentina’s 4.2mil tonnes. Paraguay exports most of its soybeans to Argentina, the world’s top supplier of soymeal livestock feed. Paraguay’s soybeans are known for their high protein content, which makes them attractive to soymeal manufacturers.

• Incidentally, AgWeb reported that Argentina has purchased 600,000 tonnes of soybeans from the USA. According to Reuters, this is the largest purchase of US soybeans by Argentina in 20 years. US agriculture officials were quoted as saying that soybean exports to Argentina could hit one million tonnes this year due to the drought in the country. The USDA has forecast Argentina’s soybean output to drop from 57.8mil tonnes in 2016/2017 to 39.0mil tonnes in 2017/2018F.

• Biodiesel Magazine reported that Total’s biorefinery in France is expected to start operating soon in spite of a recent controversy. Total said that the controversy was stirred up by erroneous reports saying that crude palm oil would account for 450,000 tonnes or 70% of the refinery’s feedstock. In actual fact, 60% to 70% of the feedstock supply will consist of raw vegetable oils coming from palm, rapeseed, sunflower, soybean oils and distillers corn oil. The other 30% to 40% of the feedstock will come from animal fat, used cooking oil and residues from waste or the pulp and paper industry.

• According to online news agency MercoPress, the 10-day truckers strike in Brazil are winding down, and companies from meat-packers to soy crushers are resuming operations. Primary estimates of losses for the agricultural sector could reach US$1.77bil. Since the strike began on 21 May, meat exports have fallen by 135,000 tonnes. At least 70mil chickens out of a total flock of one billion have been culled as feedmeal failed to reach the farmers. Brazil is the world’s largest chicken exporter. According to industry group ABPA, Brazil shipped 4.3mil tonnes of chicken meat in 2017.

• SGS said that Malaysia’s palm shipments fell by 9.9% MoM in May. The decline in demand in May was mainly due to a 63.7% contraction in exports to India and 4.8% slide in exports to the EU. On a positive note, Malaysia’s palm shipments to China rose by 35.3% MoM to 190,900 tonnes in May.

Source: AmInvest Research - 11 Jun 2018