Biomass-Based Diesel Imports Continue to Trend Higher
Renewable diesel imports outpaced biodiesel imports during September, as they have done every month other than July.
While organic corn prices remain subdued because supplies have increased relative to demand, organic soybean prices remain elevated, with further potential upward price risk due to the uncertainty surrounding India.
Container ports in India saw an average drop in throughput. Nhava Sheva Port India’s largest container port, registered a throughput of approximately 63% in April, while the Port handled the volume of approximately 80% what it saw in April of 2019. Ports have been actively attempting to avoid the spread of COVID-19, and keep the supply chain working efficiently. The port schedule shows containers actively leaving India and arriving in Baltimore, New Orleans, and Oakland at a rate of 2-3 per week. The Port handled a total of 167 vessels in April 2020.
An issue that should be concerning to traders who are short organic beans or meal is that the flow of containers into the country is rising relative to containers that are leaving. India’s ability to unload and replace containers is slowing as the quarantine has sent many of these workers back to villages and out of India.
There is also an issue with economic growth and the ability of the country to draw workers to the grain industry. A report from Goldman Sachs warned that India was headed for its deepest recession ever. GDP will contract by 45% year over year in the Q2. The stimulus passed by the government is more of a reflection of their fear of a credit downgrade than concern over economic contraction.
This issue comes as demand appears to be robust and sentiment toward organic food is gaining traction. The OTA reported on a survey they conducted that shows that 46% of respondents, indicated that organic dairy was important and 39% said that organic meat was a preference. The sentiment is likely to perpetuate when COVID restrictions are relaxed, but it will likely take a long time before restaurants are 100%, and the spillover will migrate to retail, where sentiment toward organic meat and dairy remain robust.