Malaysia biodiesel exports to stay high as CPO values remain weak

13 July 2011 04:40  [Source: ICIS news]

SINGAPORE (ICIS)--Malaysia’s biodiesel exports will likely stay high this month, after surging in June, as sharp declines in feedstock crude palm oil (CPO) translated to lower prices of the green fuel, traders said on Wednesday.

Demand for biodiesel, particularly from Europe, is seasonally strong during mid-year, market sources said.

In June, official data from the Malaysian Palm Oil Board (MPOB) showed that Malaysia’s biodiesel shipments spiked to 5,685 tonnes - a record monthly volume this year – from just 54 tonnes in May.

Malaysia is southeast Asia’s second-largest exporter of biodiesel, after Indonesia.

Meanwhile, June prices of feedstock CPO heavily declined from May. As at end-June, CPO prices stood at Malaysian ringgit (M$) 3,480/tonne ($1,149/tonne), down 11.2% from M$3,130/tonne in end-May, said a trader.

CPO prices are expected to remain under pressure, as current strong production may lead to oversupply.

At 03:00 GMT, CPO contract for August delivery was trading at M$3,070/tonne, data from Bursa Malaysia showed.

($1 = M$3.03)

By: Serena Seng

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