-  Bloomberg reported that the Solvent Extractors’ Association of India is seeking to raise the import duty on crude vegetable oils from 2.5% to 10%. The association is also lobbying to increase the import duty on refined vegetable oil from 10% to 25%.

-  Currently, vegetable oil refiners in India are operating at utilisation rates of 35% to 40% versus 65% to 70% previously.

-  Based on the rates of 2.5% for crude and 10% for refined, the tax differential between crude and processed vegetable oils is 7.5%.

-  What the Solvent Extractors’ Association is seeking would increase the tax differential to 15%. This would help support the palm refining industry in India as it would encourage buyers to switch to domestically-processed palm oil instead of imported refined oil.

-  It was also reported that palm oil inventory at the major ports in China had fallen to a low level of 660,000 tonnes as at 8 October. Inventories had fallen since August 2014 due to curbs in commodity financing.

-  The highest level of palm oil inventory was 1.2mil tonnes each on 23 May and 21 February this year. The lowest level was 660,000 tonnes.

-  Last year, the highest level of palm oil inventory at the major ports in China was 1.46mil tonnes while the lowest level was 880,000 tonnes.

-  Finally, Brazil’s CONAB crop agency has forecast the country’s soybean crop at 88.8mil- 92.4mil tonnes this year.

-  In comparison, USDA (US Department of Agriculture) had projected a figure of 94mil tonnes.

-  CONAB also said that farmers in Brazil have been delaying their forward sales in anticipation of a recovery in soybean prices.

-  Only 10% of soybeans had been sold forward compared with the usual 25% to 30%.

-  The possibility that sales could be concentrated around harvest time is being viewed with concern by industry experts.

Source: AmeSecurities