Argentine biodiesel exports face uncertainty amid YPF controversy

19 April 2012 23:12  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Argentine biodiesel exports to Spain and the EU could suffer a serious blow if Spain and the rest of Europe retaliate for Argentina’s expropriation of energy producer YPF, biofuel sellers said on Thursday.

“The market is empty this week due to the uncertainty regarding what is going to do the EU with the YPF deal,” a seller in the Argentina region said. “Business that was done before the YPF crisis is being fulfilled, but there is no interest on buying anything new.”

There was sentiment that the Spanish market would likely be lost and sellers have started to consider alternate sales destinations.

“We don't know what is going to happen with the Spanish market, probably [it] is going to be lost, but it's hard to tell when and if it's going to be replaced by some other destination,” the seller said.

Soy methyl ester (SME) biodiesel values were assessed by ICIS as steady amid lack of business at $1,231-1,251/tonne (€936-951/tonne) FOB (free on board) Rosario, Argentina.

Argentine biodiesel production for 2012 is projected at a record 3bn litres (792m gal), with Argentina becoming one of the world’s top producers, according to the US Department of Agriculture Foreign Agriculture Service.

“A profitable and growing domestic mandate and profitable exports continue to attract big investment. Most large-scale companies already in the business have or are projecting to expand their capacity,” the department’s report said.

There is talk in the market that Spain is preparing sanctions against Argentina, which will be approved on Friday by the Spanish Council of Ministers after passing the Executive Committee of Economic Affairs.

Three Argentine Senate committees approved on 18 April a bill allowing the state to take over YPF from Repsol. The Spanish-based energy producer owns a majority stake in the company.

Argentine President Cristina Fernandez de Kirchner sent the bill to the Senate on 16 April, under which the government would obtain a 51% stake in YPF, effectively expropriating the company.

The bill goes to the full Senate next week. If approved, the bill would go before the Argentine House.

($1 = €0.76)

By: Brian Ford
+1 713 525 2653

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