By Niluksi Koswanage
Feb 5 (Reuters) - Malaysia has issued this year's tax-free crude palm oil export quotas of 3 million tonnes after weeks of delay, sources said on Sunday, ending speculation it would scrap the quota to help its refiners compete with Indonesian rivals. Sources with direct knowledge of government plans said some palm oil firms like IOI Corp and state run plantation agency FELDA received their quotas last week. The total quotas account for 15.5 percent of projected output this year in Malaysia, the No.2 producer. The move ends weeks of talk that Malaysia would scrap the quota, which has tightened regional supply for its refiners after Indonesia raised its export tax for the crude grade to jump-start its own processing industry. Malaysian refiners now struggle to compete against Indonesian rivals who enjoy better margins, with growing national output and refined palm oil export taxes that were slashed last year to half that of the crude grade. "The refiners have not been forgotten. The government is looking at providing incentives to refiners to encourage them to go further downstream and produce higher value products compared to Indonesia," a government source said. "The incentives will be done via special funding from the government. There will be an announcement at the end of this month," added the source. Local media said last week that the government would scrap the duty-free export quota for crude palm oil while maintaining 23 percent export tax for the grade to safeguard the refining industry. Malaysia does not tax refined palm oil exports. SPOTLIGHT ON EXPORT QUOTAS The 2012 tax-free export quota for crude palm oil is less than the 3.6 million tonnes shipped out without any tariffs to Malaysian-owned refiners in Europe and Asia. As in the past, the government has an option to increase the quota to meet the demands of the licence holders, though that might not happen this year due to slower imports from Indonesia, the sources said. Plantations holding export licences say the delay by the government to issue quotas slowed shipments in January, putting their businesses and long existing contracts at risk. Cargo surveyor Societe Generale de Surveillance reported a 13 percent drop in Malaysia's January exports from a month ago. Crude palm oil shipments alone slumped 56 percent. Shipments of refined, bleached and deodorised palm olein -- used in cooking oil -- fell just 6.4 percent as there was enough crude palm oil supply in Malaysia for refiners to process even though some demand had shifted to Indonesia. Refiners say the delay in issuing export quota helped to curb rises in domestic price in January. They also say the quota system is not transparent and is subject to abuse, with licence holders offering tax-free crude palm oil to domestic refineries -- accusations planters deny. "It is election year and government wants to keep firms like FELDA happy as it handles a lot of local farmers who need to offload their crude palm oil," said a Malaysian refiner in Kuala Lumpur. "The incentives the government promises may not even amount to much; we will have to wait and see. Or maybe we should just look at shifting some of our operations to Indonesia or having more joint ventures with Indonesian firms," he added. (Reporting by Niluksi Koswanage; Editing by Will Waterman)
Palm oil inventory in Malaysia probably declined to a five-month low in January after production fell for a third month, according to a Bloomberg News survey. Stockpiles fell 2.4% to 1.99 m tons, dropping below the 2 m-mark for the first time since August, according to the median estimate in a survey of three analysts and two plantation companies. Inventories were 1.42m tons a year earlier, according to the Malaysian Palm Oil Board, which is scheduled to publish its estimates on Feb. 10. (Bloomberg)
Soybeans (Source: CME)
US soybean futures ended slightly lower, with prices hovering near unchanged levels for most of the day. Positioning ahead of Thursday's USDA reports after prices rallied for five straight trading days produced a choppy atmosphere, analysts say. Beneficial rains in South America and stability in the cash market applied pressure to prices, while declines in the US dollar and general strength in broader commodity markets provided offsetting support, analysts say. CBOT March soybeans ended down 1c at $12.32/bushel.
Soybean Meal/Oil (Source: CME)
Soy product futures end mixed, with soyoil continuing to gain value in the crush vs soymeal. Traders are unwinding long meal/short soyoil spreads, consolidating positions on fears of slower meal demand amid poor margins for livestock and South American rains expected stabilize crop yields there, analysts say. CBOT March soymeal ended down $2.10 at $325.40/short ton; March soyoil ended up 0.01c to 52.17c/pound.
India's Jan oilmeal exports down 14.23 pct y/y- trade body
Feb 7 (Reuters) - India's oilmeal exports fell 14.23 percent in January to 549,716 tonnes, a top trade body said on Tuesday, which analysts said was primarily due to a ban on the country's oilmeal imports by China.
Soymeal exports, which account for bulk of India's oilmeal sales, were at 474,993 tonnes in January, down 17.39 percent from a year ago, the Solvent Extractors' Association of India said in a statement on Tuesday.
Drought eats into Brazil's 2011/12 soy crop-Celeres
SAO PAULO, Feb 6 (Reuters) - Brazil's 2011/12 soybean crop forecast fell to 72.04 million tonnes from 74.4 million tonnes in early January, as the effects of a prolonged dry spell plays out on the world's second biggest soy crop, grain analysts Celeres said on Monday.
Brazil harvested a record 74.9 million tonnes of soy last season.
Argentine soy crop seen at least 47 mln T-source
BUENOS AIRES, Feb 6 (Reuters) - Argentina's 2011/12 soy harvest will be at least 47 million tonnes while corn will come in at no less that 22 million tonnes, a government official who asked not to be identified said on Monday.
A drought in December and early January chopped crop expectations in Argentina, which is the world's No. 2 corn exporting and No. 3 supplier of soybeans. Original unofficial estimates were as high as 30 million tonnes for 2011/12 corn and 52.7 million tonnes for soybeans.
China eyes U.S. soy as drought shrivels LatAm crop
SINGAPORE/BEIJING, Feb 6 (Reuters) - China, the world's biggest food shopper, is likely to buy more U.S. soybeans this quarter, as a withering drought is expected to cut the South American harvest, pushing soy prices up to fresh highs.
Benchmark Chicago soy has risen for three weeks on the relentless southern hemisphere summer, and analysts say prices could head higher, with U.S. stockpiles seen shrinking as China locks in supplies after the Lunar New Year break.
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