-  Last week, the Malaysian government said that it would be implementing Malaysian Palm Oil Certification Scheme or MPOCS to certify palm oil produced in the country.

-  The government will be allocating RM50mil for smallholders to get MPOCS certification. The Plantation Industry and Commodity Minister said that MPOCS is more practical as it takes into account the interests of small, medium and large palm oil producers.

-  The timeline for the implementation of MPOCS was not disclosed.

-  Australia’s Bureau of Meteorology said that the warming of tropical Pacific Ocean has levelled off in recent weeks. Positive southern oscillation index values and large areas of warm water in the western Pacific and off north-western Australia have also been opposite of typical El Nino development.

-  In spite of this, the bureau’s climate models are still indicating that El Nino is likely to develop by spring 2014 (September or October).

-  Independent cargo surveyors reported that palm oil shipments from Malaysia declined by 7.8% to 8.3% in the first 15 days of June compared with the same period in May.

-  The decline was due to falls in exports to China and European Union (EU). SGS said that palm oil shipments to China contracted 11.9% while EU’s palm oil imports plunged by 51.1%.

-  These were partly mitigated by improved demand from the US and India. Palm oil exports from Malaysia to India rose 5.7% in the first 15 days of June compared with the same period in May while the US’ palm oil imports climbed by 48.3%.

-  Finally, it is not known if the commodity financing scandal affecting metals trading in China would spread to soft commodities such as soybean and palm oil. So far, it has been confined to hard commodities such as copper and iron ore. Only Qingdao Port has been affected so far and not the larger hubs such as Shanghai.

-  Metal traders were quoted as saying that China’s imports of copper and iron ore may fall as banks withhold credit financing. There have been allegations that a Chinese trading company had illegally pledged metals as collateral to more than a financial institution. 

Source: AmeSecurities