The European ETBE market will find support from the upcoming E10 fuel uptake in Sweden and the UK as the availability of feedstock ethanol is…
Jun 11, 2021
The European ETBE market will find support from the upcoming E10 fuel uptake in Sweden and the UK as the availability of feedstock ethanol is expected to tighten, according to sources.
Sweden will introduce E10 fuel, which is an eco-friendly blend of gasoline and 10% ethanol, from August 1 this year, with the UK expected to follow suit in September, according to the UK Department for Transport and Bioenergy International.
The European ETBE FOB AR premium to MTBE remained stable both day on day and week on week at $261.65/mt on June 10, with little spot activity heard, S&P Global Platts data showed.
However, the switch to E10 will inevitably increase demand for ETBE feedstock ethanol, forcing both outright prices and the ETBE premium to MTBE higher.
“E10 in the UK will certainly have an impact on the spread of MTBE to ETBE, we should see an increase as demand for ethanol increases,” a market source said June 9. “At the moment we can sell more [ETBE] than we can produce for Q3.”
E10 is already active across much of Europe, with France currently the biggest European consumer of the fuel, with a 50% fuel consumption market share in the country.
Currently bio-MTBE, produced from second generation feedstock biomethanol, has struggled to gain traction in the European market due to high production costs associated with the fuel ether, according to sources.
Bio-MTBE and MTBE have the same technical characteristics. However, the biomethanol feedstock is classified as a waste product by the EU Renewable Energy Directive (RED) — doubling its value for determining bioenergy content. This allows market participants a greater opportunity to meet EU specifications for biofuel use and CO2 reduction.
In comparison, ETBE is not eligible for double counting as the ethanol feedstock is predominately obtained from first-generation crop fermentation. With the increased uptake of E10 and the corresponding jump in ethanol demand, the price differential between ethanol and biomethanol is expected to widen, increasing the attractiveness of bio-MTBE as a gasoline blending component.
“Switching to bio-MTBE [from ETBE] will make more sense when the split between ethanol and biomethanol rises due to the uptake in E10 in the coming months,” a trader said.
However, due to the fragmented application of RED II throughout EU member states, the uptake of bio-MTBE may be affected, sources said.
“In Sweden there is currently no incentive to use bio-MTBE as their mandate is GHG based,” the same trader said.
Oct 19, 2021
We are delighted that the S&P Global Platts Geneva Sugar Conference is back, bringing together leading growers, processors, traders and buyers to explore the state of the European sugar markets, and understand the trends, risks and challenges into 2022 and beyond.
As global economies prepare to emerge into a new world, what will be the new normal for the sugar industry? The sugar markets have had to grapple with falling consumption, adverse weather and supply chain challenges. Vaccine optimism brings hope of a return to many industries that the sugar markets heavily rely on, but have consumer habits changed for good?
Jun 09, 2021
From the production of greener gasoline to lower-carbon plastics, bionaphtha is a versatile product poised to be key in the transition to a cleaner energy future.
Driven by innovative technologies and emerging regulations, supply of, and demand for, bionaphtha are building across Europe, alongside the potential for a liberalized, transparently priced market.
It’s tempting to refer to naphtha as “Greek fire”—it was the base for the secret formula of the Byzantine Greeks’ superweapon of the seventh century—so let’s start with some clarity on what we mean by bionaphtha. The terms bionaphtha, green naphtha and renewable naphtha are largely used interchangeably for the same product, which we’ll refer to as bionaphtha for consistency.
Although an emerging market, bionaphtha is largely a byproduct of the more lucrative and well-known renewable diesel. Unlike naphtha, it’s worth noting that the definitions for the better-known biomass-based diesel are not interchangeable and denote different products.
Traditional biodiesel is a first generation fatty-acid-methyl-ester (FAME) product, created from vegetable oil and fats. Renewable diesel is a second-generation hydrotreated vegetable oil (HVO) product from renewable waste and other raw materials not competing with the food chain. European bionaphtha is a byproduct of second-generation biofuels, such as HVO, not FAME.
Bionaphtha, just like legacy naphtha, is primarily used as a gasoline blending component or a feedstock for petrochemical crackers that make ethylene, propylene and butadiene, key for consumer plastics production. Alternatively, if there is a demand shortage, it can be used to fuel refinery operations.
Bionaphtha shares a similar molecular makeup to its fossil fuel cousin, and has the same uses as a petrochemical feedstock or gasoline blendstock.
There are several different grades of naphtha, with the predominant in Europe being Platts’ benchmark open specification. Producers say bionaphtha can meet the legacy naphtha specification.
Naphtha end users look closely at paraffinic content—which petrochemicals producers want in higher quantity—naphthenes and aromatics. They also check contaminants such as sulphur and chloride levels. The range between the initial and final boiling points in Europe can often span between 30C-210C, while the benchmark open specification ranges from 30C-180C.
Not many bionaphtha grades have specs that are publicly available, but UPM BioVerno naphtha, for example, includes a maximum sulphur content of 10 mg/kg, maximum boiling point of 210 C, and density at 15 C of maximum 775 kg/m3, making it largely paraffinic and therefore attractive for petrochemical cracking operations.
While most companies proudly display their bio-bonafides, the amount of production that is specifically bionaphtha is much harder to ascertain as most do not report fixed production levels. As in traditional naphtha production, output will fluctuate depending on the cost of raw materials, demand levels and other factors.
From current biorefineries, bionaphtha could likely account for 5% of total output, according to industry sources. Of that, more than 90% is already committed to buyers, leaving some room for spot activity. While production volumes are growing, most material doesn’t yet reach the open market. Producers such as ENI and Preem often supply their own downstream operations.
Global supply is estimated at 250,000 mt-500,000 mt per year, with Europe responsible for more than 100,000 mt, according to industry sources.
However, as demand is anticipated to grow in the next three to five years, total supply volumes are set to double in line with expanding European capacity, with notable growth projected in the next five years. There has been much media reporting on diesel or sustainable aviation fuel production, but bionaphtha is a byproduct and will grow as well.
Although renewables production does not currently enjoy the same profitability as oil, capital investments are certainly evidence that the market is motivated by more than wishful thinking.
Neste’s Q1 2021 financial report showed that the company’s renewable products segment, which includes bionaphtha and biopropane, accounted for 90% of total operating profits, up from 66.3% in 2018. The increase followed capital expenditures in these areas that represented 89% of the total in Q1 2021, compared to 33% in Q1 2018. Neste’s current annual production capacity—including its Singapore refinery—totals 3.2 million mt of renewables, with global production capacity set to increase to 4.5 mt in 2023, a company spokeswoman said.
UPM’s branded BioVerno bionaphtha is sold into both gasoline blending and bioplastics production. The company is planning a second biorefinery with a 500,000 tons/year capacity.
“We are increasingly seeing bionaphtha as an equally important part of our business and future plans,” said vice president of UPM Biofuels, Panu Routasalo.
Preem’s Gothenberg, Sweden, refinery has produced diesel with 30% renewable content since 2010. In 2017 the company announced an increase from 10% to 16% in the renewable content of its Evolution-brand gasoline. The forest-derived renewable components are 10% bionaphtha, 5% ethanol and 1% ETBE.
Other entrants in the European market such as Kaidi, are also planning to produce bionaphtha on a commercial scale as the product is anticipated to be important for both plastics production and transportation fuels, said Sunshine Kaidi CEO, Pekka Viljakainen.
While Scandinavian producers have been leading the European renewables market growth, continental players such as TotalEnergies (formerly Total), Shell, and ENI, have increasingly expanded offerings. A side-effect of coronavirus shuttering refineries worldwide was the acceleration of some biofuel production plans.
Repsol will build Spain’s first advanced biofuels plant in Cartagena, with annual total capacity of 250,000 tons of hydrobiodiesel, biojet, bionaphtha, and biopropane. The company also has plans for a renewable hydrogen plant in Bilbao by 2024, producing another key product for the energy transition.
Austria’s OMV is also making investments to reduce the carbon footprint in their Schwechat refinery. The company anticipates demand for its hydrogenated biofuels to increase tenfold by 2030.
In 2019, Neste, UPM, and ENI produced a combined volume of bio-naphtha between 100,000mt-150,000 mt/year in Europe for use as a chemical feedstock, according to a Nova Institute report. The institute projects demand to grow substantially.
Many companies provide more information on their wider biofuels offering than bionaphtha specifically. Phillips66 entered the European renewable diesel market in 2018 with its Humber, UK, refinery and is planning to increase capacity to 5,000 bpd by 2024. Although it is unclear whether renewable naphtha will be produced there the capacity likely exists.
The company plans to convert its San Francisco Refinery in Rodeo, California into one of the world’s largest renewable fuels plants, bringing an initial 800 million gallons per year (52,000 bpd) of renewable fuels production capacity online by 2024, including bionaphtha.
Americas-based producers have been increasingly active in the renewable naphtha market, notably Marathon petroleum and Valero, but these volumes are not yet moving to Europe. Bionaphtha production is smaller, and thus loaded on smaller vessels, which tend to make shorter voyages or stay within a single company’s system. European bionaphtha trades in small clips—one trader said 3kt was common—although it is less clear what sized vessels are used. Still, arbitrage dynamics between Europe and the US could develop depending on regulation.
Missing from this picture are several household names and as with any emerging market, other companies are likely to expand into bionaphtha as demand grows for bioplastics and transportation fuels.
Bionaphtha is made from a wide range of organic materials such as wood pulp residue, vegetable oil waste, used cooking oils and fish fat. Key in this is crude tall oil (CTO), which is largely a byproduct of wood pulp production from pine trees, according to ETIP bioenergy. This takes what could be a waste product from the paper-making process and gives it new life as a renewable fuel.
Leading CTO producers include Scandinavia, Russia and the USA. According to a study by Ecofys, these countries combine for approximately 91% of global production with Scandinavia accounting for roughly 30% of that. It should come as no surprise then that prominent renewables producers are associated with Sweden and Finland, notably UPM Biofuels, Neste and Preem.
CTO’s future availability is uncertain as demand is anticipated to rise sharply alongside biorefinery buildouts. Renewable transportation fuel demand rose 76% during 2010-2019 according to Eurostat and is projected to rise further alongside stricter 2030 targets in Europe set by the RED II directive. This leaves one wondering, is there is enough forest in Scandinavia?
While CTO is the predominant raw material for UPM, its planned expansion will use sustainable liquid waste and residues. Neste also uses a variety of raw materials including vegetable oil waste and residues alongside CTO.
Moving from conifers to the continent, TotalEnergies will convert its Grandpuits refinery by 2024. It will primarily use European animal fats as well as cooking oil, supplemented with other vegetable oils, excluding palm.
ENI announced in early 2021 that its chemical company Versalis will use bionaphtha and other sustainable materials to produce petrochemicals for manufacture of furniture, clothes, carpets and several other consumer products. Bionaphtha is produced at ENI’s biorefineries utilizing vegetable oils, exhausted food oils or other types of organic waste.
Shell plans to produce bionaphtha at its German Rheinland refinery using biomass and green hydrogen, which is in turn produced by splitting water into hydrogen and oxygen in an electrolyser powered by renewable electricity.
Similar to a healthy diet of quality fruits and vegetables, going green does not always come cheap. Renewable products including bionaphtha are currently priced at hefty premiums over fossil-fuel alternatives.
Several market participants indicated that renewable naphtha in May 2021 could be valued at between $1200/mt-$1800/mt, for example. In contrast, Platts CIF NWE benchmark naphtha averaged $592.94/mt in May 2021 and $544.57/mt in May 2019. Road fuels such as gasoline and diesel, which averaged $663.86/mt for CIF NWE gasoline cargoes and $559.54/mt for ULSD 10ppm CIF NWE cargo in May 2021 respectively, offer another yardstick for comparison.
Market sources said bionaphtha is commonly contracted, discussed and priced as a differential to its oil-based predecessor, Platts benchmark CIF NWE naphtha cargoes. Even though most volumes stay in-system or committed to term contracts, there have been several NWE spot bionaphtha trades, according to industry sources. It’s unclear how often these spot trades occur or in what volumes.
Given the little spot activity it’s not surprising that prices reported to Platts vary. Bionaphtha could be priced from $500-$600/mt for open specification naphtha, to a factor of 2 or 3 times more, sources said in May.
Due to the product’s close relationship to renewable diesel, prices could also correlate with gasoil, sources said. This would also be a steep premium, above the range of $500-600/mt in Europe, they said. Additionally, each producer’s biorefinery economics will vary, also influencing volatility in pricing. Production costs would comprise raw materials, storage facilities, processing, and transportation to name a few elements.
Capital expenditures will also likely trickle down into the price. Key players have substantially invested in research and development since continuous technological advancement is common in biofuels. Crucially, substantial capacity expansion and infrastructure investment is required, which tie invested capital for much lengthier time periods than standard exploration and production oil operations. We will expand on these topics however in part two.
Bionaphtha is an emerging market without firm standards or norms, and little by way of public information. If you would like to give feedback on this report or discuss any of the issues raised further, please contact email@example.com.
New Delhi — China — the world’s largest soybean importer — lost over half of its pig population between 2018 and 2019 to the African…
May 11, 2021
Subsequently, the country’s hog industry underwent a massive overhaul, which included consolidation and stringent regulations. As a result, China’s swine population and soymeal-based feed demand started recovering in 2020.
China’s agricultural ministry forecast the country’s swine herd to fully recover from the epidemic in 2021.
According to S&P Global Platts Analytics, despite the resurgence of ASF in China, its soybean demand is forecast to remain robust in 2021 amid strong hog herd growth rate.
Platts Daily Grains enables confident trading and investment decisions through price assessments, freight prices, market heards, analysis, and news for the grains, oilseeds, vegetable oils,…
Jun 01, 2021
Platts Daily Grains enables confident trading and investment decisions through price assessments, freight prices, market heards, analysis, and news for the grains, oilseeds, vegetable oils, animal feed and protein markets.
World events continue to heavily impact the rapidly evolving grains market. Insight from S&P Global Platts is unbiased, helping you to make confident decisions in these changing times.
We’ve been covering the grain markets for the past 7 years and continue to expand our coverage, including adding new Black Sea/Europe Grains reports to our portfolio.
Our Daily Grains report gives a quick and comprehensive glimpse into what is moving the market, across regions, every working day. This supports you to:
– Manage and hedge price risks
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For compliance teams, our rigorous methodology can strengthen negotiations between counterparties and contribute to internal auditing.
For senior strategists, S&P Global Platts market heards enable the benchmarking of company activity against that of the market. The ability to drill down to detailed data provides an opportunity for crucial interrogation of pricing, supply and demand.
Market participants, keen to minimize risk and maximize opportunity can use insight in our Grains Daily report to both plan and deliver their strategy. We understand that access to independent information and timely application of pricing analysis can be critical.
Daily information and transparent methodology, that reflects published and verified pricing information, can be fundamental to maintaining a competitive edge in a world impacted by climate change, population growth, energy demand and changing tastes.
Mar 22, 2021
Commodity markets continue to watch US inflation data closely, while Asian oil refiners wait for developments in US-Iran talks that would allow a resumption of…
Jun 14, 2021
What’s happening? The US Bureau of Labor statistics released their consumer price inflation statistics for May which indicate a continuing acceleration of inflation. Overall inflation rose to 4.9%, while core (ex-food and energy) inflation rose to 3.8%, but from a low base due to pandemic impacts. More telling, overall inflation showed acceleration to 6.9%, annualized, on a 3-month over 3-month basis, while core accelerated to 5.2%. The acceleration was beyond expectations: it indicates inflationary pressure is continuing to build.
What’s next? The US Federal Reserve has already indicated it sees these inflationary impacts as “transitory”, and has outlined a framework for allowing inflation to remain elevated and focus on “average inflation” and sustainability against its 2% target. The rise in implied inflation has been constructive to the continuing rise in commodity prices. The debate is whether the rise in inflation represents the cyclical impact of coronavirus, or structural shifts in labor markets and supply chains. If the impacts are more structural, it would prompt the FED to pull forward their timeline for tapering and rate increases. These are currently outlined by them as 2022-2023, but the market appears to be anticipating action sooner.
What’s happening? South Korea completely halted imports of Iranian crude and condensate since May 2019, and refiners including SK Energy and Hyundai Oilbank were since then raising purchases of Mexico’s Maya crude and Russia’s Urals Blend as alternative feedstocks to Iranian Heavy and Forozan crudes.
What’s next? South Korea will likely alter its crude oil procurement and trading strategy if the sanctions on Tehran are lifted, with Mexican and Russian suppliers poised to lose a big portion of their market share in the world’s fifth largest crude importer.Major South Korean refiners said Maya and Urals could lose out when Iranian oil returns to the international market. The country’s refineries were all primarily designed and configured to process Middle Eastern sour crude, hence it is a lot more effective in technical terms to feed the systems with Iranian oil rather than crude from the Americas and Europe, industry and refinery sources said.
What’s happening? UK nuclear generator EDF Energy closed its 1.25-GW Dungeness B nuclear plant with immediate effect June 7, throwing in the towel on efforts to keep the ageing plant going to 2028. The duel advanced gas-cooled reactor (AGR) power station in Kent had been offline since September 2018 due to “significant and ongoing technical challenges.” In particular, changes to the condition of hard-to-access boilers within the reactors themselves contributed to a final decision to close the site.
What’s next? While market players said Dungeness B’s absence had been priced into winter 2021-22 contracts, its closure adds downside to the UK’s deteriorating dispatchable plant outlook. Adding the early closure of reactors at Hunterston B and Hinkley Point B by the middle of 2022, UK installed nuclear capacity will have fallen by a third from current levels to 6 GW by end-2022. “With Calon’s gas fleet expected to be out of action this winter and the Drax and West Burton coal plants only available in extreme conditions, we are likely to see a repeat of last winter’s extreme prices (see chart) in the event of cold, still weather, particularly if power demand recovers from the lockdown-limited levels seen last winter,” said S&P Global Platts Analytics‘ head of European Power Analysis, Glenn Rickson.
What’s happening? South American soybean oil FOB differentials or basis to correspondent Chicago Board of Trade futures have plunged to considerable lows due to a combination of surging CBOT contracts and limited export demand, with outright prices in Argentina and Brazil still at historical high levels. The Argentinian FOB Up River basis dropped by 1,100% year on year, while the Brazilian FOB Paranagua basis fell by 837% over the same period.
What’s next? Despite lower FOB differentials or basis, outright USD per metric ton prices in Argentina and Brazil remain at high levels because of the current CBOT futures levels. Market analysts say Chicago’s contracts should remain supported by expected tight global stocks and prospects of growing biofuels demand in the US as the country recovers from coronavirus-related economic impacts.
Assessing the impact of significant change for the sector The Coronavirus has sent shockwaves through the global economy. But the impact has been felt particularly…
Sep 10, 2020
The Coronavirus has sent shockwaves through the global economy. But the impact has been felt particularly in the oil markets as restrictions on movement (local and international) came into force across the globe hitting transport fuel demand.
Whilst the impact to the European Biofuels market is hard to gauge yet, the uncertainty of when life could return to normal, the potential of further lockdowns and the economic slowdown look set to cast an uncertain road ahead for our sector.
At a critical time for our sector, join S&P Global Platts online biofuels event. A part of the thought leadership series on Platts LIVE, this important discussion will address how biofuels players are adapting in this time of great uncertainty.
Planting across the European continent all but concluded by the end of May, with dry weather concerns and expectations of shifts towards greater Indica production…
Jun 11, 2021
Planting across the European continent all but concluded by the end of May, with dry weather concerns and expectations of shifts towards greater Indica production abounding in some markets.
Across the continent, output is expected to increase in 2021, with the US Department of Agriculture (USDA) projecting harvested area to expand by 0.7% on year to 423,000 hectares and milled rice production also to increase by 1.4% on year to 2 million mt. Most of the expansion in area is expected to be driven by Italian and Portuguese farmers.
Ahead of the start of planting operations in Italy, Ente Risi Nazionale (ENR) projected total planted area at 229,300 hectares, up by 0.9% on year. Initial indications suggested that 2021 round grain planted area will contract by 13% year on year to 58,700 hectares. At the same time, ENR also projected that Indica planted area will expand by 14% to 48,000 hectares.
However, with this survey taken in February before Indica reached its price highpoints amid continent-wide shortage concerns and with farmers yet to buy seeds, it is generally expected that the round grain decrease and Indica increases will likely be starker that what was initially projected. Approximately 20% year on year increases for the risotto varieties – Arborio and Carnaroli – are also anticipated.
While no major concerns were raised during planting, one major mill raised concerns about dry weather in April and a broker reported below-average temperatures and windy conditions causing problems and delays throughout. However, assuming a normal summer, this broker projected a start to the harvest around Sept. 20-25, only slightly delayed from the usual mid-September start.
While no official information was available in late May, a Portuguese mill reported that planting started early and “generally went quite well” amid favorable weather conditions. In 2020, the country suffered from water availability issues which constrained domestic production significantly. However, the mill stated that “most” of these issues have been resolved – “only a small area in the southern region had some minor restraints, but nothing relevant.”
The Portuguese mill also noted that there is likely to be a “considerable” shift away from Japonica production due to the high prices farmers were able to achieve within Europe for Indica paddy this year. While Indica production in Portugal typically accounts for around 5% of total output, this source projected that between 20%-30% of planted area was Indica this year.
A Greek mill similarly reported that planting was ongoing in late May “but without problems.” As in other countries, a shift towards greater Indica production is anticipated. The mill reported that this shift is “not so big, about 10%”, with approximately 80% of the Greek crop still anticipated to comprise Japonica.
Despite reports of a broadly unchanged year-on year crop by the USDA, a major mill in the Spanish heartland of Seville reported that “the situation is really bad.” In some areas in the region, water is only available to plant 30% of the crop and at best, the region will plant 50% of fields. While the region is more known for producing Indica than Japonica due to climactic conditions, the mill added that “almost 100% will be Puntal long [grain] rice.”
A European broker agreed that reduced rainfall in recent months is likely to limit planting in the south of Spain, projecting that some areas would only plant 30%, but this could expand if rains pick up. The source added that the rest of the country will plant as normal, “just a bit late (about 20 days),” with no major shift in production around Seville or in Valencia between Japonica and Indica anticipated.
In Europe’s four main rice producing countries, a mixed picture has emerged for planting. In all countries bar Spain, a substantial shift towards Indica production at the expense of Japonica has been reported – especially for Portugal and Italy. And while some planting inconveniences have been reported in other countries, it is only Spain in which major production decreases could be recorded, specifically in the south of the country. However, with three months until the start of harvesting on the continent, there is a lot of time for fortunes to change.
India’s imports of crude palm oil in May were up 10% month on month to a four-month high at 769,602 mt, data released by the…
Jun 14, 2021
India’s imports of crude palm oil in May were up 10% month on month to a four-month high at 769,602 mt, data released by the national trade body showed, helped by a gradual reopening of lockdowns and palm oil’s price advantage over other edible oils.
India’s May CPO imports were slightly above industry expectations of 750,000 mt, and meant imports during the first seven months of the marketing year (November-October) were up 39% to 4.44 million mt due to the higher spread between soft oils and palm oils, the Solvent Extractors’ Association of India said June 14.
India, the world’s largest buyer of palm oil, purchases about 8 million-9 million mt per year. However, imports took a hit when a sharp rally in vegetable oil prices and pandemic-led restrictions slowed local demand in the past year.
India has has faced a massive second wave of COVID-19 infections since March, prompting many states and districts to enforce local restrictions on movement, social gatherings and the hotels, restaurants and catering sector.
“Local demand will be down 3%-4% in the first two weeks of June. But, overall, this month will increase [imports] on a month-on-month basis,” Marcello Cultrera, institutional sales manager at Philip Futures, said about the demand outlook.
“Over the past six sessions, BMD prices reversed by 960 points (230 dollars). Each time we have seen strong reversals over the past six months, demand always improved,” Cultrera said.
Malaysia continued to be the leading importer of CPO to India, with Indonesia in second position as the country’s $255/mt export levy gave Malaysian palm oil a big price advantage, according to SEAI
Both Malaysia and Indonesia — which account for 85% of the world’s palm oil supply — have set progressive tax slabs on CPO exports which increase incrementally as reference prices of palm oil cross per-determined thresholds. However, Indonesia has tagged an additional export levy to subsidize its internal biodiesel mandate
Malaysian imports grew to 2.34 million mt in the seven months to May, while Indonesia’s imports were at 1.95 million mt, SEAI data showed.
Palm oil prices have risen sharply over the past year, tracking higher soybean oil prices with which it competes for market share in the commodity markets. The average CIF India price of CPO was $1,250/mt in May, versus $558/mt in May 2020, according to SEAI.
Meanwhile SEAI data showed palm oil imports from Thailand crossed 100,000 mt in May. While India imports very little-to-nil palm oil from Thailand, imports zoomed in May as Thai-origin palm oil was $10/mt cheaper than larger rivals, industry watchers said.
Corn exports from the US for the 2020-21 marketing year (October-September) were seen rising by 3 million mt from previous estimate to a record high…
Jun 10, 2021
Corn exports from the US for the 2020-21 marketing year (October-September) were seen rising by 3 million mt from previous estimate to a record high of 73 million mt, reflecting continued strong foreign demand and limited supplies in Ukraine and Brazil, the US Department of Agriculture’s Foreign Agricultural Service said in its World Market and Trade report June 10.
The previous record was of 63.7 million mt exported in 2017-18, the report said.
“For the first half of the current trade year, the export pace was well ahead of previous levels with large volumes to China and many other destinations,” the report said. “US corn exports are expected to be robust for the remainder of the year, with large sales on the books,” it added.
Total commitments for US corn – cumulative exports plus outstanding sales – were reported at 69.298 million mt for 2020-21 marketing year (September-August) on June 10, according to the USDA. The yearly total was 68% above the year-ago volume during the same week.
Corn exports to China from Ukraine — traditionally the leading exporter to China — have more than doubled from a year ago despite smaller available supplies, the FAS report said. “This has left countries in North Africa, Middle East, and Asia to look to the US for corn,” it added.
For Brazil, exports were lowered this month, reflecting persistent dry conditions in several states where the second-crop corn is produced, the report said. The second-crop corn, particularly in the Center-West, is primarily destined for overseas markets.
The agency sees Brazil’s corn exports for 2020-21 at 32 million mt, down 2 million mt from previous estimates.
The global corn market is supplied primarily by four countries – the US, Brazil, Ukraine, and Argentina. Combined, these countries account for nearly 90% of global corn exports.