26 October 2012 08:45 [Source: ICB]
Biodiesel market players are not surprised at Spain's recent cessation of the importation ban on Argentine and Indonesian biodiesel, traders said.
Spain's ministry of industry announced it will not implement the import restrictions on Argentine biofuels it put forward less than six months ago.
A rule of the Spanish ministry of industry, dated 9 October and published late on 18 October in the official gazette of the country, annulled the allocation process of biodiesel to meet their market for 2013 and removed restrictions halting imports from Argentina and Indonesia.
"The measure can have a negative effect on oil prices," said Spanish industry minister Jose Manuel Soria Lopez. He explained that the measure had been dropped "in order not to harm those affected" by a price hike.
"I'm not surprised," a large trader said. "We figured Spain would drop the restrictions by the end of the year."
Soy methyl ester (SME) biodiesel values have been largely steady amid lack of business at $1,125-1,150/tonne (€855-874/tonne) FOB (free on board) Rosario, Argentina.
In April, the Argentine government effectively expropriated oil company YPF, a unit of Spain's Repsol YPF. President Cristina Fernandez de Kirchner sent a bill to the senate, under which the government would obtain a 51% stake in the company, amid escalating tensions and accusations of continued decline in oil and gas production in Argentina.
The takeover followed more than two months of government pressure on YPF to boost investment and output.
The Spanish government initially retaliated by announcing it would impose restrictions on the import of biofuels, a measure that would mainly affect Argentina and Indonesia, the two main exporters of biofuels to Spain.
The Spanish government was due to make public the import quotas it would ask from EU producers the week of 22 October.
Argentine biodiesel production for 2012 is projected at a record 3bn litres (793m gal), with Argentina becoming one of the world's top producers, according to the US Department of Agriculture Foreign Agriculture Service report.
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