- Bloomberg quoted a government official as saying that Argentine farmers have US$6bil worth or 16.8mil tonnes of soybeans for exports. The farmers also have corn reserves of US$3.4bil or 20.1mil tonnes, which can be sold when the export tax for corn is abolished. Argentina’s new President is expected to take office on 10 December. He has said that the export tax for soybean would be reduced from 35% to 30%.

- In spite of the bearish news, soybean prices rose last week as the US EPA (Environmental Protection Agency) released biofuel targets for 2015F and 2016F. The targets are for 16.9bil gallons of renewable fuel to be blended into gasoline in 2015F and 18.1bil gallons in 2016F. The targets are higher than the proposed levels in May but lower than the targets lobbied by the biofuel producers. Nevertheless, the announcement is expected to support corn and soybean prices. According to USDA’s (US Department of Agriculture) latest report, about 21.8% of soybean oil is forecast to be used as feedstock in the US biodiesel industry in 2015F/2016F.

- Bloomberg cited Eurochem Group, which is a potash producer, as saying that potash prices are near the bottom. Although fertiliser prices (in USD terms) may decline further next year due to expansions in capacity and weaker demand, the potash market will be more stable. Industry experts have said that potash prices (in USD terms) may decline in China next year. Phosphate and nitrate prices are also expected to be pressured by excess supply.

- Oil World expects India’s imports of vegetable oils to climb by 7% to 15.2mil tonnes from October 2015 to September 2016 due to a shortfall in domestic production. Oil World said that India’s dependence on vegetable oil imports will stay alarmingly high, with at least 76% of consumption being covered by imports vs. 57% five years ago. Consumption of vegetable oils is expected to improve by 5% to 15kg per capita in 2015F/2016F underpinned by the growth in the middle-class population.

- SGS reported that Malaysia’s palm oil exports fell by 10.2% in November compared to October. European Union (EU) imported 18.8% more palm oil while China received 2.7% more palm oil shipments. On the other hand, palm oil exports to India fell by 31.8% MoM in November and USA’s palm oil imports contracted by 39.4%.

- Finally, Bloomberg quoted a government official as saying that Indonesia’s proposed palm oil economic zone was only a concept and not a Memorandum of Understanding (MoU). The concept came within the context of the MoU signed on 21 November 2015 to set up a Council of Palm Oil Producing Countries with Malaysia.

Source: AmeSecurities Research - 7 Dec 2015