- Last week, soybean prices inched up 1% to US$13.25/bushel on continued concerns over the dry weather in Brazil. In line with this, CPO prices rose by 1.8% to close at RM2,661/tonne.

- In spite of the hot weather, CONAB, Brazil’s official crop bureau only trimmed its forecast for the country’s soybean production marginally by 320,000 tonnes to 90mil tonnes for the current harvesting season.

- Last Monday, USDA (US Department of Agriculture) projected the country’s soybean production at 90mil tonnes for 2013/2014F compared with 82mil tonnes in 2012/2013.

- Reuters reported that rain will finally enter the southernmost part of Brazil’s coffee belt. Rain has also started pouring in Rio Grande de Sul.

- Weather experts said that rain was due to pass through Minais Gerais. Rainfall was supposed to intensify last weekend in other coffee-producing regions of Brazil.

- Malaysian Palm Oil Council (MPOC) is on track to launch the Malaysian Sustainable Palm Oil (MSPO) standard this year. Indonesia introduced its own standard called ISPO (Indonesia Sustainable Palm Oil) two years ago.

- The MSPO standard will initially be on a voluntary basis for local players.

- We believe that Malaysian plantation companies, which have RSPO (Roundtable Sustainable Palm Oil) certification, would not face any problems complying with MSPO. The companies would probably have to pay a nominal fee to be MSPO-certified.

- The issue is one of implementation. It remains to be seen if MPOC or MPOB (Malaysian Palm Oil Board) would have enough manpower in the certification team. In any case, MSPO is not mandatory yet.

- In another development, the Minister of Plantation Industries and Commodities will seek further allocation from the government for the replanting scheme for smallholders. The Ministry will also propose to extend the replanting period from 2014 to 2020.

- According to Bernama, some RM2.49bil was allocated for replanting covering 108,000ha of oil palm from 2011 to 2013.

Source: AmeSecurities