Thailand to soon replace B3 biodiesel with B5 blend

04 January 2011 07:05  [Source: ICIS news]

SINGAPORE (ICIS)--Thailand is expected to soon replace its use of B3 biodiesel with a B5 blend that has a higher percentage of palm-based biofuel to combat against rising crude oil prices, sources said on Tuesday.

Thailand, the world’s third largest producer of palm oil, was scheduled to make B5 biodiesel mandatory on 1 January this year but recent shortages in the commodity and price hikes have delayed its enforcement, according to a trader.

Crude palm oil (CPO) futures on Bursa Malaysia Derivatives closed at ringgit (M$) M$3,867/tonne ($1,260/tonne) on the continuing strength from other vegetable oils markets and concerns over tight supplies, sources said.

The implementation of B5 biodiesel, which contains 5% palm-based biofuel, was now expected to be delayed to June as officials await the next harvest period in March and April that would determine palm oil prices in the second and third quarters of the year, sources said.

“If palm oil price hikes up again in Q2, I believe it is unlikely that Thailand would enforce the B5 mandate in June, they may postpone it to a later date,” a Malaysian producer added.

($1 = M$3.07)

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By: Serena Seng

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