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AMIS Market Monitor

last release: June 2018

Policy Developments

Biofuels

  • On 28 May, Argentina decided to increase the soybean oil-based biodiesel export tax from 8 percent to 15 percent, effective from 1 July 2018.
  • On 16 May, the Union Cabinet of India released the National Biofuels Policy 2018, expanding the range of feedstock available for ethanol to sugarcane juice, beet, sorghum, maize and cassava, rotten potato, wheat and broken rice. The policy also allows farmers to divert excess crop produce to biofuels production and establishes a viability gap funding scheme of INR 5 000 crore (USD 74.13 million) in six years, tax incentives, as well as higher purchase prices to set up second-generation ethanol refineries. 
  • The Department of Energy in the Philippines raised the quarterly allocation for ethanol for the third quarter of 2018 by 55.65 percent to 114 633 cubic metres.
  • On 1 May, the state of Minnesota in the US decided that a biodiesel blending rate of 20 percent would apply during the period April-September (a 5 percent blending rate applies during the winter months). Since May 2012, the rate had been 10 percent. 

Across the board

  • On 2 May, the State government in Western Australia established a fund of AUS 24 million (USD 18.04 million) to promote grain-related research and development.
  • On 17 May, Australia notified the WTO of a proposal to amend the Australia-New Zealand Food Standards Code, revising the Minimun Residue Levels (MRLs) for certain chemicals in rice, wheat, barley and other cereal grains. Comments are invited until 20 July 2018 (G/SPS/N/AUS/449). 
  • On 1 May, China further reduced the VAT on the sale and importation of agricultural products, including grains, from 11 percent to 10 percent. The VAT had been reduced from 13 percent to 11 percent in 2017. On 18 May, the Ministry of Commerce also dropped anti-dumping and countervailing duty investigations on imports of US sorghum, announcing that any deposits would be returned.
  • On 2 May, the European Commission proposed a 'Multiannual Financial Framework' for the period of 2021-2027, allocating a budget of EUR 365 billion (USD 423.57 billion) to CAP reform, subject to acceptance by EU member States and the European Parliament. Some EUR 10 billion (USD 11.61 billion) were earmarked to support research and innovation in food, agriculture, rural development and the bio-economy.  
  • On 18 May, the European Union notified the WTO of a list of products of US origin subject to additional import duties of 25 percent including certain maize and rice products. 
  • On 18 May, under WTO procedures, India notified a list of products of US origin that could be subject to additional import duties, including a 5 percent increase of import duties on wheat and soybean oil. Conditional upon further consultations between the parties, the effective date of implementation of India's measure is 21 June 2018.  
  • On 1 May, an agriculture-wide credit scheme worth THB 90 billion (USD 2.8 billion) and potentially targeting some 3 million farms was introduced in Thailand for 12 months. Through the Bank for Agriculture and Agricultural Cooperatives, farmers were granted "Happy Farming" loan cards to purchase fertilisers, pesticides, seeds, fuel and small farm equipment from 17 000 designated stores, at an annual interest rate of 3 percent compared to a commercial rate of 7 percent. The repayment period runs until 30 April 2020. A second loan scheme worth THB 3.6 billion (USD 112.5 million) was also extended to farm cooperatives nationwide. 

Logistics/Infrastructure/Trade Junctures

  • In response to rising fuel costs, truck drivers in Brazil have started a nationwide strike. The duration and intensity of the strike has disrupted agricultural and food production, distribution and exportation networks in virtually all sectors and economic activities. On 27 May, the Federal Government also provisionally introduced a Road Cargo Transportation Minimum Price Policy (No. 832/2018). The new scheme is yet to be approved by the National Congress. 
  • On 23 May, Canada passed the Transportation Modernization Act, which is expected to improve the timeliness and efficiency of grain transportation, particularly when delays are owed to bad weather.