Palm Oil Internet Seminar

Section 1: Palm Oil Price Fundamentals:
Global Soybean Outlook 2017 - Impacts on Palm Oil Market
By: Mr. Oscar Tjakra

Oscar Tjakra is the Executive Director, RaboResearch Food & Agribusiness. He is located in Singapore, and focuses on palm oil and grains and oilseeds sector.

Oscar was previously a RaboResearch Food & Agribusiness Analyst with Singapore branch from July 2008 to October 2010 covering various sectors including grains and oilseeds, sugar, cocoa and animal protein.

In his most recent role, he was Senior Vice President of Freight Research with Oldendorff Carriers Singapore, where he led global supply and demand research of the grains & oilseeds sector.

Oscar holds a Master of Science in Applied Finance from Singapore Management University and Bachelor of Engineering (Hons) from Nanyang Technological University.

Global soybean production exceeded 300 million tonnes for three consecutive years prior to the 2017/2018 season – and 2017/2018 is shaping to be another high production season, potentially pushing ending stocks to near-record highs. On the same time, global soybean demand remains very strong, driven by an expansion in global animal protein production.

Global trade has been a key feature of soybean market over the past year, with global exports increasing to a record export in 2016/2017 and potentially setting another record in 2017/2018. Of particular interest is the continued strength of Chinese soybean imports, which we expect to continue increasing, albeit at slower growth rate.

This presentation will provide soybean outlook for the 2017/2018 season and how it will impact palm oil markets.

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Questions & Answers (2) :
R.C. Tan
7 years ago
Your presentation provides details on the US and Brazil soybean production outlook. What about Argentina? Would you be able to share their soybean production outlook?
Posted on behalf of the speaker : Soybean production in Argentina for 2017/2018 marketing year is currently forecast at 57 million tonnes, slightly lower than 57.8 million tonnes in the previous marketing year. This is due to expected slower acreage growth increase and normalization of yields. On top of that, farmers will most probably hold on to their soybean inventories in the expectation of lower soybean export tax which will be implemented from January 2018 onwards.
7 years ago
Kamalrudin Mohamed Salleh
7 years ago
Thank you for your presentation. US has just announced that they would impose countervailing duties ranging from 50.29 percent to 64.17 percent for biodiesel from Argentina and 41.06 percent to 68.28 percent for biodiesel from Indonesia. How would this latest development affect your outlook on palm oil.
Posted on behalf of the speaker : The US’ Import duties for biodiesel from both Indonesia and Argentina will have positive impact on US soyoil price, which will provide support for global edible oil prices and global soybean complex prices. The support for global edible oil prices, however, will be limited due to availability of Argentina’s soyoil and Indonesia’s palm oil. My outlook for palm oil price remains bearish. Even though current Indonesian biodiesel exports have decreased since the peak in 2013, the US still accounts for about 90% to 93% of total Indonesian biodiesel exports, which total 418,691 tonnes in 2016 and thus requires about 1.1% of the Indonesian palm oil production. This import duties will add into more availability of palm oil in the market. In 2016, the US imported 2.19 million tonnes of biomass-based diesel fuel from Argentina and Indonesia. In extreme case where the US chooses to replace the whole imported biodiesel amount by producing domestically, US biodiesel producers would likely require an additional 4.06bn lbs of soyoil feedstock annually or an additional 18% of current total annual US use. However in reality, the amount of soyoil required by US biodiesel producers could be significantly lower as biodiesel imports from other countries (primarily the EU and Canada) and alternate feedstock sources (such as corn oil) would curb requirements by domestic processors. On top of that, producing the minimum amount of biodiesel required to meet US EPA mandates would require less than the 2.19m tonnes of biodiesel imports, potentially reducing the feedstock required wo well below 4bn lbs
7 years ago
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