Indonesia ends temporary palm oil export ban

IN BRIEF

UKRAINE: Ukraine exported 140,071 tonnes of sunflowerseeds from 1 May-15 May, bringing total exports since the beginning of the marketing year to a record 311,711 tonnes, due to lower demand from domestic crushers and low local prices prompting traders to increase exports, AgriCensus wrote on 18 May.

However, the volumes reported by customs did not reflect exact volumes transported due to lengthy queues at the country's borders and along the Danube River delaying delivery, the report said. The main buyers included Bulgaria, Romania, Hungary and Turkey.

The US Department of Agriculture forecasts that Ukrainian sunflowerseed exports would total around 350,000 tonnes by the end of the 2021/22 season.

RUSSIA: The export duty on sunflower oil was set to increase by US$152.80/tonne – or 41% – to US$525/ tonne from 1 June, AgriCensus reported on 4 May.

The duty was based on a floating index that valued sunflower oil at US$1,750/ tonne.

The export duty on sunflower meal would increase by 9% to US$105/tonne, with both fees in place until the publication of an update, AgriCensus wrote.

RUSSIA/UKRAINE: Following anecdotal evidence from the United Nations that Russian troops were seizing Ukrainian harvests – including wheat, barley and rye – the Ukrainian Ministry of Defence’s intelligence arm has said that Russian ships carrying stolen Ukrainian grain had reached the Mediterranean Sea and were likely to be heading to Syria, where it could be supplied to other Middle East countries, Fortune reported on 12 May.

Attack on Ukrainian port despite talks on exports

Photo: Adobe Stock

Russian president Vladimir Putin has said that he is prepared to allow “unhindered” grain exports from Ukraine ports in coordination with Turkey, Reuters reported on 30 May from a Kremlin account of talks between Putin and Turkish president Tayyip Erdogan.

However, a Russian attack on silos at the Ukrainian port of Mykolaiv has raised doubts on the likelihood that Russia will allow Ukrainian crop exports, according to a 6 June AgriCensus report. "Traders are losing confidence Russia will live up to their expectations to allow Ukraine to export grain, after two warehouses with sunflower meal at Nikatera were hit by a rocket over the weekend," Terry Reilly, senior grain and oilseed commodity analyst at Futures International, said.

With prices of grain, cooking oil, fertiliser and energy soaring since Russia's invasion of Ukraine on 24 February, the United Nations (UN) says a global food crisis is deepening and is trying to broker a deal to unblock Ukraine's grain exports, according to the Reuters report.

“During the discussion of the situation in Ukraine, emphasis was placed on ensuring safe navigation in the Black and Azov seas and eliminating the mine threat in their waters,” the Kremlin reportedly said of the talks between Putin and Erdogan.

Putin, according to the Kremlin account, had added that if sanctions against Russia were lifted, it would allow Russia to “export significant volumes of fertilisers and agricultural products.”

It was not immediately clear which Ukrainian ports Putin was speaking about, Reuters wrote. Ukraine's main grain export ports include Chornomorsk, Mykolaiv, Odesa, Kherson and Yuzhny.

Erdogan said that Turkey was ready to support any peace efforts between Ukraine and Russia, and was prepared to take on the role of third-party observer to ensure that any agreement was followed by both sides, once reached.

Against this backdrop, the UN and the Russian government have had “constructive discussions” aimed at increasing grain and fertiliser exports from Russia to global markets, Reuters reported UN spokesperson Stephane Dujarric as saying.

UN Secretary-General Antonio Guterresis is trying to broker what he calls a “package deal” to resume both Ukrainian food exports and Russian food and fertiliser exports, according to Reuters.

Crop forecasts as sowing nears end

Ukraine's spring crop sowing campaign reached 12.64M ha or 89% of the planned area as of 26 May, AgriCensus reported the country's agriculture ministry as saying.

Further progress was expected to be limited with about a third of the area normally available to Ukrainian farmers – some 12M ha – inaccessible due to occupation by Russian troops, close proximity of farmland to hostilities, landmines in fields and damaged artillery, tanks and other material in liberated territories, the 26 May report said.

With spring sowing coming to an end, it was possible to make estimates on the potential harvest for 2022, AgriCensus wrote.

The Ukrainian Club of Agrarian Business (UCAB) forecast that this year, Ukraine could harvest close to 50M tonnes of grain and 16M tonnes of oilseeds, specifically: • Wheat: 18M tonnes (against 32.2M tonnes in 2021) • Corn: 25.7M tonnes (42.1M tonnes in 2021) • Barley: 5.2M tonnes (9.4M tonnes in 2021) • Other grain crops: 1.4M tonnes (2.3M tonnes in 2021) • Sunflower: 10.6M tonnes (6.4M tonnes in 2021) • Soyabeans: 3M tonnes (3.5M tonnes 2021) • Rapeseed: 2.7M tonnes (2.9M tonnes in 2021)

"Soyabean and rapeseed show the lowest gross harvest reduction due to the relatively small weight of the crop combined with a high price, which facilitates logistics in exports," said Svitlana Lytvyn, a Ukraine-based analyst at UCAB. "Therefore, some farmers have increased these crops."

However, total gross harvest would be reduced due to a lower sown area and reduced yields resulting from less fertilisers, and other yield inputs.

NEWS Indonesia ends temporary palm oil export ban

Indonesia ended its palm oil export ban on 23 May, following its shock announcement a month earlier that it would temporarily halt exports of crude and refined palm oil; refined, bleached and deodorised (RBD) palm olein; palm oil mill effluent (POME) and used cooking oil.

The ban was introduced on 26 April as the country struggled to control soaring cooking oil prices against a backdrop of mounting civil unrest.

Indonesian chief economics minister Airlangga Hartarto said at a press conference on 20 May that as well as lifting the ban, the government would reinstate its Domestic Market Obligation (DMO) and Domestic Price Obligation schemes to ensure continued supply of domestic cooking oil.

Hartarto said the government was looking to set a DMO of 10M tonnes of cooking oil, with 8M tonnes for domestic consumption and reserves of 2M tonnes.

The state food procurement agency Bulog would also set up a buffer stock of cooking oil at 10% of domestic demand.

A Reuters report on 25 May said that palm oil producers' mandatory domestic sales volume would be based on their refining capacity, with producers and exporters also required to participate in the government’s bulk cooking oil programme.

The Indonesia Palm Oil Association (GAPKI) said some aspects of the DMO would also be determined by other rules, such as the technical procedure to calculate the volume of the DMO. The industry was still waiting for the government to announce those rules and no export permits had been issued yet, GAPKI added.

Meanwhile, the government plans to audit all palm oil companies operating in the country and require them to move their headquarters onshore amid efforts to improve governance of the sector, senior cabinet minister Luhut Pandjaitan said.

China lifts ban on canola imports from Canada

The Chinese government has lifted its ban on canola imports from two of Canada’s largest exporters, three years after it suspended their licences amid escalating tensions between the two countries, The Globe and Mail reported on 18 May.

A statement from Global Affairs Canada on 18 May said that China had advised Canada of its decision to reinstate the licences of Viterra and Richardson International, which had been banned since March 2019.

Prior to the 2019 ban, China – the world’s largest canola importer – had imported US$2.8bn/year worth of canola from Canada, The Globe and Mail wrote.

The ban was imposed at a time of heightened tensions between China and Canada. In late 2018, China had denounced Canada for its move to arrest and authorise extradition proceedings against Huawei chief financial officer Meng Wanzhou. The move was followed by China’s arrest of two Canadians, Michael Kovrig and Michael Spavor, who were accused of espionage-related offences. All three were released last September.

At the time of the initial ban, China cited quality concerns as the reason behind it, claiming its inspectors had found pests in samples. However, the move was widely regarded as retaliation for Canada’s actions against Wanzhou.

China’s lifting of the ban was welcomed by Canola Council of Canada president Jim Everson. “This is a positive step forward, restoring full trade in canola with China and ensuring that all Canadian exporters are treated equally by the Chinese administration,” he said.

The ban had cost the industry between US$1.5bn and US$2.3bn between March 2019 and August 2020, the trade organisation said.

In late 2019, Canada had taken the case to the World Trade Organization (WTO). The WTO set up a dispute resolution panel in 2021. In its submission to the WTO at the time, China said “the measures were imposed to the extent necessary to protect human, animal or plant life or health and in a transparent and non-discriminatory manner.”

China is the world's largest canola importer Photo: Adobe Stock

India allows duty-tree imports of crude soya, sun oils

The government of India will allow duty-free imports of 2M tonnes of both crude soyabean oil and crude sunflower oil for the current and next fiscal year to March 2024 in a bid to control local prices, according to a 24 May Reuters report.

Prior to the announcement on 24 May, trade and government officials had said India could cut an import tax on crude soyabean oil and crude sunflower oil.

Traders now needed to seek their import quota from the government, Reuters wrote.

India – the world’s top importer of edible oils – had previously abolished the basic import tax on crude palm oil, crude soyabean oil and crude sunflower oil, but continued with a 5% tax known as the Agriculture Infrastructure and Development Cess (AIDC) on the three grades of edible oils.

Industry body, the Solvent Extractors' Association of India, had requested the government to also consider cutting or abolishing the 5% AIDC on crude palm oil, the report said.

India, which imports more than twothirds of its edible oil needs, has been struggling to control local edible oil prices in recent months, according to the report, with Russia’s invasion of Ukraine and the resulting shortage of edible oils making it even more difficult for the government to contain prices.

NEWS

Rainforest destruction still widespread

The destructi on of rainforests remained widespread last year, according to new data from the University of Maryland reported by the World Resources Insti tute’s Global Forest Review.

Tree cover totalling 11.1M ha was lost in the tropics last year.

The loss of 3.75M ha of tree cover in tropical primary rainforests – areas of criti cal importance for carbon storage and biodiversity – was of parti cular concern, the report said.

Over 40% of deforestati on – a total of 1.5M ha – took place in Brazil last year and, as in previous years, persistent high rates conti nued in the Democrati c Republic of the Congo, where almost 500,000ha of primary forest was lost due to the expansion of small-scale agriculture and tree harvesti ng to meet energy demands.

In contrast, primary forest loss dropped in Indonesia for the fi ft h consecuti ve year, falling by 25% compared to 2020. New research showed that deforestati on linked to palm oil is at a 20-year low with No Deforestati on, No Peat and No Exploitati on (NDPE) commitments now covering 83% of palm oil refi ning capacity in Indonesia and Malaysia. In additi on, the Roundtable on Sustainable Palm Oil had ti ghtened sustainable certi fi cati on requirements in 2018 to prohibit deforestati on and peatland clearing, the report said.

Deforestati on would need to decline at a much faster rate to meet 2030 zero-deforestati on targets, the Global Forest Review wrote, and although Indonesia’s rapid decrease in primary forest loss should be acknowledged as a major achievement, achieving similar declines around the world would not be straightf orward.

Cubiq Foods to scale up with Cargill funds

Spanish alternati ve fat company Cubiq Foods announced on 9 May that it had raised a total of €5.75M (US$6M) in funding from four investors, including global agribusiness giant Cargill.

Cubiq Foods said the investments would allow it to expand commercial and producti on operati ons in North America and Europe and to launch new products. Cargill’s investment was the fi rst step in a partnership that included a product development plan and an agreement to market and sell Cubiq Foods’ products.

Last year, Cubiq Foods launched Go!Drop, a plant-based fat replacement which could be used as an alternati ve to animal fats in processed meat products, dairy derivati ves, bakery products, confecti onery and saturated vegetable fats (such as coconut oil) in vegan food products.

Later this year, Cubiq Foods said it would be launching Go!Mega3, a micro-encapsulated omega-3 product and, early next year, it would be launching its fi rst culti vated fatbased ingredient for food applicati ons in the US market.

“Our strategic partnership with Cubiq will help us bett er serve our customers by accelerati ng the development of plant-based alternati ves,” said Vivek Cherian, meat and dairy alternati ves category leader for edible oils at Cargill.

The other investors apart from Cargill were Moira Capital Partners, SGEIC and Newtree Impact. www.ofi magazine.com OFI – JUNE 2022 7