Volatile feedstock impacts biodiesel market

12 March 2008 17:07  [Source: ICIS news]

LONDON (ICIS news)--Volatile palm and vegetable oil prices have fuelled concern in the European biodiesel market, players said on Wednesday, with many uncertain where prices will eventually settle.

 

Recent record highs in palm oil, which saw prices peaking at ringgits (M$) 4,486/tonne ($1,408/tonne) EXW (ex-works), have caused a surge in biodiesel prices.

  

Rapeseed methyl ester (RME) and fatty acid methyl ester (FAME) saw gains of over $50/tonne (€32/tonne) and $160/tonne respectively during the past month, with most agreeing it was now impossible to predict what would happen.

 

One trader said the volatility in the vegetable oil market had led to sellers withdrawing biodiesel offers when vegetable prices hit a high.

 

However, with an easing in prices now prevalent, buyers were unwilling to lure offers and instead had adopted a wait and see stance.

 

One broker said it saw no positions in the market and had heard little in the way of third-quarter business, predicting that FAME prices might hit highs of $1,500/tonne FOB (free on board) NWE (northwest Europe).

 

($1 = M$3.21)

($1 = €0.65)

 

By: Fiona Bond
+44 20 8652 3214

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