Robust US crops put pressure on Europe biodiesel

13 August 2008 13:11  [Source: ICIS news]

LONDON (ICIS news)--Biodiesel in Europe could see a further drop in prices as forecasts of a robust US soybean and corn harvest increase the likelihood that low feedstock costs would continue into September, US Department of Agriculture (USDA) statistics showed on Tuesday.

Soybean prices have been declining since early July, when they reached a high of $16.63/bushel. Prices have now fallen 27% with the August soybean contract valued at $12.095/bushel on Tuesday.

More than 100,000 tonnes of soy methyl ester (SME) was expected to arrive in Europe from the US and Argentina in September and traders were worried about finding buyers for the product.

"There is much more availability of feedstock," a broker at Starsupply said. "The SME coming into Europe - you will find homes for it, but if the prices of SME are falling then the price of FAME [fatty acid methyl ester] will come off also."

A UK-based broker disagreed saying: "Producers have their margins to think about and don’t want to sell product cheap. If SME comes off it does not necessarily mean that FAME will be sold any lower."

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By: Rachel Howat
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