Europe palm methyl ester prices fall on plummeting feedstock costs

01 October 2012 16:16  [Source: ICIS news]

LONDON (ICIS)--European palm methyl ester (PME) values have decreased as a result of plummeting feedstock costs, one source said on Monday.

“The palm oil versus gasoil spread is at -$200/tonne (-€156/tonne). The feedstock price has collapsed,” the source said.

Biodiesel prices are formulated by adding biodiesel premiums to ICE gasoil figures.

The source said PME is being offered at an outright price of $1,025/tonne CIF (cost, insurance, freight) Rotterdam/Huelva, and that this equates to a PME premium of $45/tonne over ICE gasoil.

PME has even been offered for outright prices as low as $1,000/tonne CIF ARA (Amsterdam, Rotterdam, Antwerp-Mediterranean), the source added.

According to ICIS data, these offers represent decreases of at least $41-56/tonne from 26 September, when outright prices for PME were assessed at $1,042-1,081/tonne CIF ARA.

Statistics from the Malaysian Palm Oil Board show that palm oil stocks were at 2.1m tonnes in August, the highest level seen in 10 months and up from 2.0m in July.

It is thought exports of palm oil have been weak while production has increased, as is usual for this time of year, and this is contributing to higher palm oil stocks, while exerting downwards pressure on values.

($1 = €0.78)

By: Sarah Trinder
+44 20 8652 3214

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