Malaysia's 2025 budget promotes palm waste SAF

Spanish Market: Agriculture, Biofuels, Chemicals
21/10/24

Malaysia's state-owned Petronas will work with palm oil producers to develop palm oil waste-based sustainable aviation fuel (SAF), according to prime minister Anwar Ibrahim when he presented the 2025 budget.

The palm oil producers include Malaysia-based agribusiness FGV and Malaysia-headquartered SD Guthrie, previously Sime Darby.

Anwar also announced additional higher tax brackets for crude palm oil (CPO) exports will be introduced from 1 November and proposed to increase Malaysia's windfall profit levy threshold for the palm sector. These changes are meant to ensure domestic CPO supply and encourage domestic production of value-added products including SAF and biodiesel, according to the Budget documents.

Progressive export duties will be introduced from 8.5pc when CPO prices rise above 3,600 ringgit/t ($837/t), up to a maximum 10pc for CPO prices above 4,050 ringgit/t. Previous duty rates capped out at 8pc for CPO prices above 3,450 ringgit/t.

This revised export structure is likely to weigh on palm oil prices, as exporters may reduce bids in the domestic market to keep prices below the threshold that will trigger higher export duties.

The CPO price threshold for triggering Malaysia's windfall profit levy will be increased to 3,150 ringgit/t for Peninsular Malaysia and 3,650 ringgit/t for Sabah and Sarawak from 1 January 2025, a rise of 150 ringgit/t from the previous threshold for both areas. The windfall profit levy applies to producers of palm fresh fruit bunches (FFB).

The revised export taxes and windfall profit levy threshold are expected to increase costs for the palm plantation sector, but would help the downstream palm refining industry become more competitive compared with Indonesia, according to industry consultancy Glenauk Economics.

Replanting funds

Malaysia will also allocate another 100mn ringgit to incentivise smallholders to continue replanting unproductive, ageing oil palm trees under its 2025 budget, the same amount from the previous year. The funding will be 50pc in grants and 50pc in soft loans, as in Budget 2024.

No land area target for replanting was specified this year. But this year's allocated funding of 100mn ringgit mirrored last year's allocation that targeted 5,900 hectares (ha) of land area. But this amount will likely not be enough to support adequate replanting, according to market participants.

Malaysia replanted an estimated 1.7pc of mature oil palm plantation areas during January-September and 2.6pc of mature areas in 2023, according to data from Glenauk Economics. This indicates more funding is likely needed to meet the 4pc industry standard for replanting mature areas yearly as recommended to maintain palm oil output volumes.

The low replanting rate has likely partly been because of high palm oil prices in recent years compared to the historical average. High prices discourage voluntary replanting as plantation owners prefer to continue harvesting FFB from older trees over replanting. Third-month crude palm oil (CPO) futures on Bursa Malaysia averaged 3,890 ringgit/t over the past two years up to 21 October. The average price recorded over the past 10 years was just 3,124 ringgit/t.

The US department of agriculture (USDA) estimated a quarter of planted oil palm areas in Malaysia were older than 25 years old as of early January, resulting in lower yields.

By Malcolm Goh

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02/12/24

Brazil's Mato Grosso ups 2024-25 corn outlook

Sao Paulo, 2 December (Argus) — Brazil's central-western Mato Grosso state increased its outlook for the 2024-25 winter corn crop, based on higher projected acreage. The state now expects to produce 45.8mn metric tonnes (t) of corn this season, up from 45.5mn t in November's outlook, according to Mato Grosso's agricultural economics institute Imea. That is less than the 47.2mn t produced in the 2023-24 crop. The estimate for planted area advanced to 6.83mn hectares (ha) from 6.79mn ha. That is almost 0.6pc above the 2023-24 area. The upwards revision follows recent increase of corn prices in the state, allowing for more farmers to cover production costs. Yields are estimated at 111.7 60kg bags/ha, roughly stable from November and a 3.4pc drop from 115.6 bags/ha in the 2023-24 cycle. That is a preliminary forecast based on the average from the three prior seasons, as sowing is only set to begin in January 2025. A slight change this month follows the area readjustment that alters the average for each region and their share to the state result. Cotton Unfavorable weather conditions that delayed soybean sowing dropped the state's 2024-25 cotton output to 2.7mn t, a 1.8pc drop from November's outlook. The delay in soybean sowing can extend harvest periods and hamper cotton sowing within the ideal window. Still, volumes are up by 2.4pc from the 2023-24 cycle. The year-on-year increase is still driven by cotton's higher profitability than in the previous season, which encourages farmer investments. Total sowed area is expected at 1.5mn ha, a 1.8pc decrease from November's estimate but up by 5pc from the 2023-24 season. Yields remain projected at 284.3 15kg bags/ha, based on a three-year average, since the factors that define crop yields are yet unknown, such as climate conditions and the ideal planting window period. That is 2.6pc below 2023-24 levels. Soybeans Mato Grosso continues set to produce 44mn t of soybeans in the 2024-25 season, unchanged from November's estimate. That is a near 13pc hike from the 39.1mn t in the 2023-24 crop. The 2024-25 yields remain projected at almost 58 60kg bags/ha. But it is still too early in the cycle to make more certain projections, as sowing finished last week. The prior season yielded 52.2 bags/ha. The outlook for planted area is also stable at 12.7mn ha, 1.5pc above the 2023-24 season. By Nathalia Giannetti Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Ukraine agri-exports decline on the month

02/12/24

Ukraine agri-exports decline on the month

Kyiv, 2 December (Argus) — Agricultural exports from Ukraine fell in November as an increase in shipments of corn and sunflower oil (SFO) failed to offset lower exports of wheat, barley, soybeans and rapeseed, customs data show. Ukraine exported about 5.48mn t of grains, oilseeds and by-products in November, down from 6.01mn t in October but slightly up from 5.46mn t in November 2023. Exports by all transports fell in November. But in relative terms, shipments from the deep-sea ports of Pivdennyi-Odesa-Chornomorsk (POC) continued to increase, reaching around 82pc of Ukraine's total agricultural exports. This is up from 80pc in October and only 50pc in November 2023. Agricultural exports from Danube river ports fell to 362,740t in November, from 495,225t shipped in October and 1.54mn t in November 2023. The share of products exported from Danube ports has declined to 7pc, down from 8pc in October and 28pc in November 2023. Grains Ukraine shipped 3.86mn t of grains in November, down from 3.92mn t in October, but up from 3.64mn t in November 2023 (see chart). Corn exports continued to rise, to 2.6mn t in the reporting month from 1.93mn t in October and 2.33mn t a year earlier. Turkey remained the largest buyer of Ukrainian corn in November, followed by Spain, Italy and Egypt, according to customs export declarations. In contrast, wheat exports fell to 1.11mn t from 1.65mn t in October and 1.13mn t a year earlier. Spain remained the largest buyer, while Indonesia, Bangladesh, Vietnam and Tunisia made up the top five. Barley exports declined to 157,382t last month, down from 350,055t in October and 181,368t a year earlier. Libya was the main buyer, followed by Cyprus and the United Arab Emirates. Oilseeds Ukraine exported 1.62mn t of oilseeds, vegetable oils and meals in November, down from 2.09mn t in October and 1.82mn t a year earlier. Soybean exports fell sharply to 415,284t, from 715,697t in October and 505,832t in November last year (see chart). Pakistan was the largest buyer of Ukrainian soybeans, followed by Egypt, the Netherlands and Turkey. Ukraine's rapeseed exports fell to 290,583t last month from 475,214t in October and 349,495t a year earlier. This brought Ukraine's total rapeseed exports to about 2.7mn t since the start of the 2024-25 marketing year (July-June). Exports of sunflower seed (SFS) amounted to only 1,242t in November, down sharply from 16,276t in October and 38,584t a year earlier. Exports of sunflower meal (SFM) decreased to 356,553t in the reporting month, down from 383,643t in the previous month, and from 387,397t a year earlier. China was the largest buyer of Ukrainian SFM, followed by France, Poland and Egypt. In contrast, sunflower oil (SFO) exports rose to 508,650t, from 458,260t in October and 506,218t a year earlier. India was the main destination for Ukrainian SFO in October. Spain, Italy, Iraq and Romania made up the top five. By Alexey Yeromin Ukraine grain exports mn t Ukraine oilseed, vegoil and meal exports t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Hapag-Lloyd buys bio, e-methanol from China's Goldwind

29/11/24

Hapag-Lloyd buys bio, e-methanol from China's Goldwind

London, 29 November (Argus) — Germany-based containership owner Hapag-Lloyd has struck a long-term deal to buy 250,000 t/yr of blended biomethanol and e-methanol from Chinese wind turbine maker and project developer Goldwind. The deal lasts for more than 10 years and is legally binding, Hapag-Lloyd told Argus . Goldwind will supply Hapag-Lloyd with a smaller volume initially in 2026 and ramp up to 250,000 t/yr in late 2027. Hapag-Lloyd expects the initial volumes to largely fulfil demand from the five dual-fuel methanol ships it will operate from 2026, it said. Goldwind earlier this year started building a 500,000 t/yr plant in Hinggan League, northeast China. The so-called "hybrid" plants will make biomethanol and e-methanol, and Goldwind plans to add a second 500,000 t/yr plant in 2027, the shipowner said. Hapag-Lloyd's deal is for volume from the second plant, it added. The ratio of e-methanol in the deal is 30pc but could be raised to 50pc in the plant's lifetime, Hapag-Lloyd said. The fuel ensures greenhouse gas (GHG) emissions reductions of at least 70pc to comply with current sustainability certification requirements, Hapag-Lloyd said. This is likely to refer to the FuelEU Maritime definition of low-carbon fuels as cutting GHG emissions by 70pc compared with fossil benchmarks. Goldwind previously struck a deal to supply 500,000 t/yr of the sustainable methanol mix to Danish shipping and logistics firm Maersk from 2026. While methanol appears to be gaining momentum, shipowners are pursuing a range of fuels for future fleets. Hapag-Lloyd last month ordered 24 dual-fuelled LNG containerships for a combined $4bn. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US weekly soybean sales up, corn and wheat down

29/11/24

US weekly soybean sales up, corn and wheat down

London, 29 November (Argus) — US weekly net export sales of soybeans rose in the week ending 21 November, while those of corn and wheat were down from the previous seven days, according to the US Department of Agriculture (USDA). Soybeans US weekly soybean net export sales reached 2.49mn t, rising on the week and exceeding the previous four-week average. Total commitments of the 2024-25 crop so far this season (September-August) reached 33.87mn t, compared with 30.88mn t at the same time last year. So far, total commitments account for 68pc of the US' projected soybean exports for 2024-25, according to the USDA's forecast, broadly in line with 67pc at this point last year. China booked 1.09mn t of US soybeans last week, with 306,000t of this volume having switched from a previously unknown destination. Outstanding sales of US soybeans to China stood at 4.32mn t, with total commitments to the country — exports and outstanding sales — having reached 15.81mn t since the start of the season. Grains US weekly corn net export sales declined by 29pc to 1.06mn t in the week ending 21 November. But total commitments since the start of the season in September reached 32.46mn t, or 55pc of the USDA's forecast 2024-25 exports, up by 8mn t and 13 percentage points, respectively, on the year. Export sales to Mexico rose by 405,200t in the week ending 21 November, to reach total commitments of 13.31mn t, up on the year by 1.31mn t. Of the total volume, 8.21mn t had yet to be shipped as of 21 November. Total commitments of US current-crop corn to China stood at 26,400t, a sharp drop from 1.31mn t a year earlier. As for wheat, weekly net export sales declined by a third to 366,800t in the week ending 21 November, pushing total commitments of US 2024-25 crop US wheat to 15.17mn t, up by 2.48mn t on the year. This represents 68pc of the USDA's forecast total US wheat exports for 2024-25, nearly in line with the 66pc of last season's crop committed a year earlier. Meanwhile, US weekly net export sales of 2024-25 crop sorghum were unchanged on the week at 121,200t. Total commitments reached 1.15mn t, down sharply from 3.47mn t of the previous season's crop committed a year earlier. By Anna Sneidermane Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Tall oil rosin output to decline in 2024

29/11/24

Tall oil rosin output to decline in 2024

Sao Paulo, 29 November (Argus) — Global tall oil rosin (TOR) production is likely to decline in 2024 on the back of reduced fractionation rates and softer rosin demand. Output of TOR, one of the key fractions obtained by the distilling of crude tall oil (CTO), is seen at 350,000t, down from an estimated 450,000-495,000t in 2022, two sources said. "There is still a trend for biobased natural resins, but demand is not there yet," consultant Alex Cunningham said at the Brazil Pine Chemicals Meeting in Sao Paulo on 28 and 29 November. TOR output is forecast to decline this year as CTO fractionation rates are down in the US and in Europe because of softer downstream rosin demand. Closures of tall oil refineries in the US reduced domestic CTO fractionation capacity by about 30pc, according to market participants. TOR and TOR derivatives can be used in various applications, including paper sizing, printing inks, adhesives and road marking. By Leonardo Siqueira Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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