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    Reuters reported that the European Commission has proposed duties ranging between 8% and 18% on biodiesel imports from Indonesia. The European Commission launched an antisubsidy investigation in December 2018 following a complaint by the European Biodiesel Board. The proposed import duties are 8% for Ciliandra Perkasa, 15.7% for Wilmar International, 16.3% for Musim Mas Group and 18% for Permata Group. The measures would be provisional pending the conclusion of the EU investigation and be put in place on 6 September 2019. Definitive duties typically applied for five years at the end of an investigation would need to be set by 4 January 2020.

    In response to this, Bloomberg reported that Indonesia will challenge the EU’s anti-subsidy import duties. Indonesian companies will appeal to the EU General Court and the government will take it to the World Trade Organisation.

    Bloomberg reported that following the trade talks in July, the Chinese government has given the green light to five companies to buy up to three million tonnes of US soybeans without import tariffs. The tariff-free quota of two to three million tonnes is part of the goodwill gesture to the USA. There could also be a second round of exemptions depending on how the trade talks progress. The five companies include Yihai Kerry Group (part of Wilmar International) and state-owned Jiusan Group Ltd.

    In spite of the exemption from import tariffs, Reuters cited sources as saying that Chinese soybean crushers are unlikely to buy in bulk from the USA anytime soon as they grapple with poor margins and uncertainties over the US-China trade war. Each of the five crushers asked to take part in the new plan was given a separate quota with the total volume of imports estimated between two and three million tonnes. In contrast to previous buying, which was based on government orders, the five private importers make buying decisions based on commercial interests such as crushing margins, which do not favour immediate buying. Also, industry experts suggest that any subsequent large volume of purchases will be tied to the US lifting sanctions on Huawei Technologies.

    Bloomberg cited Malaysia’s Primary Industries Minister Teresa Kok as saying that total palm oil certified under the MSPO (Malaysia Sustainable Palm Oil) programme was about 2.45mil tonnes as at end-June 2019. This would be roughly 42% of total planted areas in Malaysia. Malaysia aims to have all of its plantation estates certified with the MSPO by the end of 2019.

    The Malay Mail reported that Malaysia should not be too worried over news reports that India may raise the import duty on refined palm oil as both countries have signed the Comprehensive Economic Cooperation Agreement (CECA). Palm oil expert MR Chandran said that the request to increase the import duty was made by Indian edible oil refiners through the Solvent Extractors Association and not by the government itself. In January 2019, as part of the CECA, India reduced the import duty on Malaysia’s refined palm oil to 45% from 54%.

Source: AmInvest Research - 5 Aug 2019

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