Europe biodiesel sector faces rising palm oil prices

30 May 2007 15:59  [Source: ICIS news]

LONDON (ICIS news)--Soaring palm oil prices in Asia have created conflict over European biodiesel prices, industry traders said on Wednesday.

 

The usual trend was for higher quality soy methyl ester (SME) based biodiesel to trade at more expensive prices than palm-derived biodiesel.

 

However, some traders said this week that palm methyl ester (PME) biodiesel bids, offers and confirmed deals in Europe had reached higher levels than SME-based product, due to high palm oil prices.

 

Crude palm oil (CPO) prices touched a fresh nine-year high on Monday, as strong food demand from countries such as India and China and production shortfall in Malaysia and Indonesia pushed May futures up dramatically.

 

The European traders’ comments, however, could not be verified, as although PME deals were $10-20/tonne firmer this week at around $790/tonne FOB (free on board) Rotterdam, SME trades were still taking place at around $860/tonne FOB Rotterdam, according to global chemical market intelligence service ICIS pricing.

 

This conflict of opinion was unusual in a market that was becoming increasingly liquid, sources commented.

 

Biodiesel is an environmentally friendly fuel, created from feedstocks including rapeseed oil, palm oil, and vegetable oil.

 

By: Nicolette Allen
+44 20 8652 3214

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