USDA forecasts higher global palm oil fundamentals

: Agriculture, Biofuels, Chemicals
22/04/12

The US Department of Agriculture (USDA) has raised global palm oil output, trade and stocks forecasts in its April oilseeds world markets and trade report.

The USDA increased its global palm oil production forecast for the October 2021-September 2022 marketing year to 77.05mn t, up from 75.59mn t in its March report. Output reached 73.11mn t during the 2020-21 marketing year, according to USDA data.

The expected return of migrant workers to relieve Malaysia's plantation labour shortage boosted Malaysian production projections for 2021-22 to 19mn t, up from 18.7mn t forecast in March.

Indonesian production for 2021-22 was revised up to 45.5mn t from 44.5mn t in March, with milder climatic conditions forecast for the key Indonesian palm oil growing regions of Kalimantan and south Sumatra.

The USDA sees increased Chinese buying driving an expansion in palm oil trade. Chinese imports for 2021-22 are forecast up to 7.1mn t from 6.7mn t in the March report and against 6.82mn t received in 2020-21, as China moves to bolster dwindling vegetable oil stocks through imports with weaker soybean crushing margins.

But higher sales prices and Indonesian export tariffs for palm oil continue to limit Indian imports compared with a year previously, with a shift in demand towards soft oils in the price-sensitive market. The USDA kept its Indian palm oil import forecast for 2021-22 flat from March at 7.75mn t in the April report, down from 8.41mn t recorded in 2020-21.

Indonesia is now expected to end 2021-22 with palm oil stocks at 7mn t, up from 6.5mn t in the March USDA forecast and 5.98mn t in 2020-21. Malaysian ending stocks are forecast up to 1.82mn t, up from the 1.62mn t prediction in March and at the end of 2020-21.

By Lauren Moffitt

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25/12/19

Global beef production to decline in 2026: Rabobank

Dalby, 19 December (Argus) — Global beef production will decline in 2026, marking the first contraction in animal protein output in six years, according to the Global Animal Protein Outlook 2026 by Netherlands-based investment bank Rabobank. Herd rebuilding in North America and Brazil, combined with structural adjustments in China, will tighten supply and keep prices firm across major markets, according to the report. North America Beef cattle numbers in the US and Canada fell for six straight years in 2020-25, but stronger profitability is slowing liquidation and supporting herd rebuilding. US beef cow slaughter dropped by 19pc on the year in 2025, with the culling rate projected at 8.5pc for 2026, below the long-term average. Canada is also stabilising its herd, while Mexico faces supply constraints from disease-related import restrictions. Per capita beef supplies will likely fall by 6pc from 2020 highs, maintaining upward pressure on prices. Feeder cattle prices rose by 26pc in the US and 28pc in Canada in 2025, with further increases likely in 2026, according to Rabobank. North American imports have narrowed the supply gap, but trade tensions may cap volumes. Exports from the region will likely decline because domestic demand remains strong. Brazil and Argentina Brazilian beef production will likely fall by 5-6pc in 2026 to 10.5mn t because producers may retain cattle to rebuild herds. But exports will likely hit a record 4.4mn t because of strong global demand, a weak Brazilian real and reduced competition from other suppliers, despite lower output. China is set to remain Brazil's largest buyer, while trade diversification targets Mexico and other markets. Domestic consumption will likely drop by up to 9pc because high prices are pushing consumers toward cheaper proteins. Argentina faces similar dynamics. Production is expected to hold steady at 3.23mn t, but exports will likely reach the second-highest level on record at 880,000t, because of competitive pricing and strong demand from China, the US and EU. Local consumption will likely fall by 4pc on the back of an accelerating shift to poultry and pork. China China's beef production rose in early 2025 because of herd liquidation but will likely decline slightly in 2026 due to shrinking inventories. Beef prices will rise because of tighter supply, while the country's imports may ease by 2-3pc because of global supply constraints and higher prices. Imports account for 30pc of China's total supply. Meanwhile, retail demand remains resilient, with growth in online channels, but food service recovery will be modest. Australia and New Zealand Australian beef production will remain near record highs at 2.85mn t in 2026, supported by large cattle inventories and strong export demand from the US, Japan, South Korea and China. Prices are expected to hold firm, with the National Young Cattle Indicator forecast at A$4.30-4.80/kg ($2.84-3.17/kg). New Zealand beef output will recover gradually. The cattle population is projected to rise by 3pc and export prices are forecast to stay 15pc above the five-year average in 2026. By Amy Phillips Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: Tight lauric oils to support fatty alcohols

25/12/18

Viewpoint: Tight lauric oils to support fatty alcohols

London, 18 December (Argus) — Limited lauric oils supplies should maintain upward pressure on mid-cut fatty alcohol values into 2026. Lauric oils are a key feedstock used in the production of oleochemicals such as fatty alcohols and are primarily sourced from coconut oil (CNO) and palm kernel oil (PKO). Fatty alcohols are used in a variety of products including personal care, cosmetics, as well as in industrial applications. The fourth quarter of 2025 has been plagued with limited demand and uncertainty over the EU Deforestation Regulation (EUDR) implementation date, pushing lauric oils and mid-cut alcohols prices down. Mid-cut fatty alcohols prices hit a high of $3,100/t fob southeast Asia in early August, but prices have since declined to a low of $2,400/t in mid-December, according to latest Argus data. Tighter supply could lend support to CNO and PKO values in 2026, which could help to push mid-cut fatty alcohols prices up as costs are passed down. CNO supply has been flat for years, and new coconut tree planting in Asia will take a number of years to boost yields. PKO supplies will likely remain tight in Malaysia, even though palm oil output has risen in the country. The Malaysian Palm Oil Board (MPOB) expects palm oil production at around 19.5mn t this year, potentially hitting a record 20mn t. But PKO is a popular cocoa butter substitute and continues to command strong demand from the confectionary industry. In Indonesia, the world's largest palm producer, supplies of PKO could be curbed next year, following severe floods this and the government's palm plantation land seizure. Additional fatty alcohols capacity has come on stream in southeast Asia during the second half of 2025, and this additional demand is likely to pull on lauric oil supplies next year. Demand uncertainty On the demand side, European consumption has fallen significantly this year owing to the ongoing uncertainty surrounding the implementation of the EUDR, according to market participants. The regulation, originally slated to come into effect at the end of 2024, was pushed back to the end of 2025. But on 17 December, the European Parliament backed an additional one-year delay. This opens up the European market to more palm oil and PKO than would have been the case had the EUDR come into effect. This will likely put further upward pressure on mid-cut alcohols prices in 2026 as demand picks up from Europe. The EUDR delay postpones application of due diligence requirements by one year for large and medium operators from 30 December 2026. Small operators have until 30 June 2027. By Neha Popat Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: EU ethanol supported by mandates in 2026

25/12/18

Viewpoint: EU ethanol supported by mandates in 2026

London, 18 December (Argus) — Ethanol prices in Europe look to be well supported in 2026, and demand for higher greenhouse gas (GHG) emissions saving product is expected to grow. This comes as the EU's updated Renewable Energy Directive (RED III) is rolled out in more member states, and supply looks to be shortening in a market that has historically been well balanced. The Netherlands will transition to a greenhouse gas (GHG) emissions-saving mandate under its transposition of RED III in January. This means an end to double counting of ethanol produced from advanced feedstocks toward national mandates. Germany, another major European market, is also set to remove double counting for advanced biofuels. This being the case, demand will rise for crop-based ethanol, a staple of gasoline blending in Europe, especially for material with higher GHG savings. This has coalesced in increased interest in the Argus -assessed average 75pc GHG savings crop-based ethanol in recent weeks, with a first spot trade made on the Argus Open Markets (AOM) trade initiation platform on 16 December. Trading on these standards is the projected approach of obligated parties in some key markets as they seek to fulfil their new, higher GHG emissions savings mandates in the most economical way possible. In the year to 1 December, Argus has assessed even higher GHG savings — minimum 90pc — crop-based ethanol at an average discount of just under €180/m³ to RED Netherlands waste-based ethanol. Since the launch of the Argus ' RED Germany waste-based ethanol assessment in June, again to 1 December, the discount for high GHG savings crop-based ethanol has averaged just over €176/m³. These spreads may narrow as the projected market dynamics unfold. Supply crunch A supply gap has opened in Europe since the signing of the UK-US trade agreement in May. EU imports of UK undenatured ethanol have since collapsed, down by around 56pc on the year in May-September according to Eurostat data. The deal saw the UK remove all import tariffs on up to 1.4bn l/yr of US ethanol, which led directly to UK producer Vivergo shutting its 416mn l/yr Saltend plant in August . The EU's imports of US undenatured ethanol are also down on the year, by nearly 13pc in May-September, based on Eurostat data, as US ethanol flows are diverted to the UK . In the Netherlands, imports have been made permanently more expensive by the government ruling in October that only undenatured ethanol would be eligible for compliance under the national annual renewable energy obligation in transport. This amendment to its EU RED III transposition package means that essentially all imports of fuel grade ethanol for use in the country will be subject to the maximum import tariff of €192/m³, and not the €102/m³ tariff for denatured ethanol. These developments supported ethanol prices near two-year highs in October, and whether they stay elevated depends on imports arriving from other suppliers like the US or Brazil. EU imports of undenatured ethanol from the UK and the US between May and September were down by 44pc, or 72,300t, on the same period in 2024. Stock levels in Amsterdam-Rotterdam-Antwerp (ARA) ports were low for much of the third and fourth quarters of 2025. The US' production capacity of 52.4mn t/yr means it remains a likely candidate to fill the EU's supply gap, but this depends on demand in the UK and the prices buyers are willing to pay there. Alternatively, Brazil may be able to fill the void with production capacity of more than 78.1mn t/yr. The Mercosur-EU trade deal is likely to be signed soon and the terms would effectively open the arbitrage window permanently for ethanol producers in Brazil to send material to Europe. But implementation of the agreement could take several years. By Toby Shay Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs hit Brazil rosin ester sales for 1Q 2026

25/12/17

US tariffs hit Brazil rosin ester sales for 1Q 2026

London, 17 December (Argus) — Brazilian rosin ester sellers are losing first-quarter 2026 orders as US buyers avoid imports facing 50pc tariffs. Talks to ease duties have progressed, but US customers have already secured early-2026 volumes elsewhere, limiting Brazil's near-term sales. Even if tariffs fall soon, shipments would not reach the US in time for first-quarter delivery, sellers said. The US is a key market for gum rosin and rosin esters used in road marking and hot melt adhesives. Shutdowns at crude tall oil (CTO) refineries in DeRidder, Louisiana, and Crossett, Arkansas, cut 300,000 t/yr of US tall oil refining capacity. The closures sharply reduced domestic tall oil rosin (TOR) and TOR ester output, creating an opportunity for Brazilian product to fill the gap. Global Trade Tracker (GTT) data show Brazilian gum rosin exports to the US hit a record high of 4,602t in 2024, supported by the CTO refinery shutdowns. But exports have fallen sharply since then, totalling just 1,551t in January-November this year. Gum rosin can substitute for TOR in some applications, and both feedstocks are upgraded into rosin esters. But tariffs have kept US buyers reliant on domestic TOR ester and alternative tackifiers for adhesives and road marking. Southern European rosin esters are gradually entering the US market to cover some of the drop in Brazilian sales, sellers and buyers said. Midpoint European CTO prices fell by 18.7pc on the year to €650/t ex-mill in the fourth quarter of 2025. In contrast, Brazilian pine oleoresin prices rose by 13.8pc to 5,150 reals/t (€804/t) at the forest on 15 December from a year earlier. Pine oleoresin and CTO are feedstocks for gum rosin and TOR production, respectively, which are then upgraded into rosin esters. European derivative producers use both Brazilian gum rosin and local TOR for rosin ester output. Lost first-quarter sales and tariffs will likely curb second-quarter volumes next year, Brazilian suppliers said. Larger Brazilian sellers saw double-digit growth in the first half of 2024 compared with the same period in 2023, but orders for the first half of 2026 are at risk because of missed US sales in the opening quarter. By Leonardo Siqueira Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: Dutch ticket move to help low-emission fuels

25/12/17

Viewpoint: Dutch ticket move to help low-emission fuels

London, 17 December (Argus) — A change in the EU Renewable Energy Directive (RED III) is pushing the Netherlands, a key renewable fuel ticket market in Europe, to pivot from compliance based on energy share to greenhouse gas (GHG) savings, and should benefit fuels with higher emission savings. The Netherlands will switch to GHG-based ERE tickets on 1 January 2026. The mandate will apply retroactively if the legislation is passed beyond that date. The move more closely aligns Dutch compliance with Germany's THG quota and accelerates a broader shift to reward fuels with high greenhouse gas (GHG) savings, as well as RED Annex IX Part A feedstock status, positioning advanced Fame, hydrotreated vegetable oil (HVO) and biomethane as front-runners. RED III's overall 2030 target gives EU member states the option to reduce their GHGs by 14.5pc, or to have a 29pc renewable energy share in their overall fuel mix. This is a significant step-up from RED II, which only required states to have 14pc renewable energy in their mix by 2030. Most major states incentivise the uptake of RED targets through the use of renewable fuel ticket systems. Tickets are used by companies supplying liquid or gaseous fossil fuels in the country and are obligated to pay excise duty or energy tax on fuels. They can be traded to meet obligations and are primarily generated via the blending of renewable fuels into fossil fuels, with additional sources of tickets including electricity used to charge e-vehicles. The Dutch change will benefit fuels with higher emissions savings and move away from a more simplistic approach where one HBE ticket is equal to 1 GJ of energy use, with multipliers available based on feedstock type. The current four HBE categories will expand to 16 types of ERE tickets , defined by transport sector — land, inland waterways and maritime — as well as feedstock. An HBE-to-ERE ratio of 1:46, as per the Dutch Emissions Authority's (NEa) guidance, has already begun to guide transitional pricing. All 2025 HBEs must be submitted by 30 April, after which any non-redeemed HBEs will be converted into EREs, subject to a legal cap on the amount that can be carried from year to year. Premiums for RED Annex IX Part A fuels should grow as demand for corresponding ERE-Gs does the same. But ERE-B values — comprising fuels from RED Annex IX Part B feedstocks — will be affected by a mismatch between RED III vs FuelEU Maritime rules . Shipping mismatch Under FuelEU, a separate legislation from RED III, Part B fuels remain eligible, whereas the domestic transposition of RED III means EREs count the same as using fossil fuel for only the maritime obligation. Shipping vessels are likely to either bunker elsewhere, or opt for Part A fuels that can meet both mandates. Maritime suppliers can source up to 0.9pc of their mix from road and inland waterways, preserving a narrow role for Part B fuels via cross-sector ERE flows. But EREs from shipping cannot be used by land suppliers. Aviation fuel blending will no longer generate Dutch tickets, removing a source of Part B tickets, as the bio-component of sustainable aviation fuel (SAF) has mostly been produced from used cooking oil. Overall, liquidity in the Netherlands will fragment by sector — LREs for land, BREs for inland shipping and ZREs for maritime shipping — all taking a Dutch acronym. Across the EU, GHG-based transport fuel mandates with tight feedstock caps should tighten supply of Part A fuels and renewable fuels from non-biological origin (RFNBOs), while remaining energy-based systems may lean on conventional and Part B biofuels. The Dutch-German axis, as the largest GHG-based ticket markets, may increasingly anchor to Part A fuel tickets. Advanced biofuel suppliers will be monitoring which market provides better ticket value for their fuel at a given time. France also plans to replace its energy-based TIRUERT tickets with GHG-based IRICCs in 2027 . Outside the RED III remit, the UK is consulting on whether to follow suit as it updates its RTFO scheme; consultation updates are expected in early 2026, and any resulting changes are expected in 2027. By Madeleine Jenkins Fuel ticket systems in Europe GHG-based renewable fuel ticket systems Germany – THG (€/t CO₂e) Austria - THG (€/t CO₂e) Netherlands – ERE (€/kg CO₂e) Energy-based renewable fuel ticket systems Belgium – HEE (€/megajoule) Ireland – RTFO (€/megajoule) Italy – CIC (€/10 Gcal) France - TIRUERT (€/m3, €/MWh) Spain – CCRs (€/toe) Portugal – TbD (€/toe) Volumetric-based renewable fuel ticket systems UK – RTFO (£/litre) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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