-  Jakarta Post reported that Pertamina plans to open a third tender in March or April to buy palm oil-based biodiesel.

-  According to previous reports, the third tender would involve procurement of about 850,000 kilolitres (300,175 tonnes) of biodiesel for Sumatra, Nusa Tenggara, parts of Kalimantan, Sulawesi and Papua. These areas are logistically more difficult.

-  Wilmar International and Musim Mas were among firms, which have won Pertamina’s past tenders. Recall that so far, Pertamina has only secured 2.381mil kilolitres (840,489 tonnes) or 45% of its two biodiesel tenders for 5.3mil kilolitres (1.9mil tonnes).

-  The same report quoted Indonesian Palm Oil Association as saying that Indonesia’s use of palm oil for biodiesel is likely to fall 41% short of its target this year due to the rally in CPO prices. In another report, Jakarta Post reported that the Indonesian government is planning to introduce a new pricing arrangement for biofuel.

-  The director of Energy and Mineral Resources Ministry said that the new formula is being prepared and is likely to be implemented in 2015. Currently, the selling price for biodiesel is said to be unappealing for producers.

-  Finally, soybean price retraced by 2.1% to US$13.88/bushel last week on rumours that China was delaying more than 500,000 tonnes of soybean shipments from Brazil.

-  According to reports, ports in China are full with soybean. China’s demand for soybean is weakening due to the outbreak of bird flu and falling hog prices. Soybean crushing margins are said to be negative this month.

-  Soybean prices also fell on USDA’s (US Department of Agriculture) report, which pointed to higher-than-expected US soybean ending inventory for 2013/2014F.

-  USDA forecasted ending inventory of US soybean at 145mil bushels for 2013/2014F compared with consensus estimate of 141mil bushels. The ending inventory of 145mil bushels for 2013/2014F was 2.8% YoY higher.

-  Ending inventory of world soybean is estimated to increase by 22.2% YoY to 70.6mil tonnes in 2013/2014F. USDA revised its forecast of soybean production in Brazil downwards by 1.7% to account for the effects of the drought. However after the revision, Brazilian soybean production is still anticipated to rise by 7.9% YoY to 88.5mil tonnes in 2013/2014F. 

Source: AmeSecurities