EU trade concessions for Pakistani ethanol causing concern - trader

06 November 2012 10:44  [Source: ICIS news]

MUNICH (ICIS)--The EU’s decision to grant a duty-free quota to imports of Pakistani ethanol could have a major impact on the European traditional ethanol market, a trader said on the sidelines of F.O. Licht's World Ethanol and Biofuels 2012 conference on Tuesday.

The European Parliament passed a resolution on 13 September 2012 imposing a duty-free import quota of 93,750 tonnes on undenatured ethyl alcohol of Pakistani origin.

The ethanol quota is part of a wider trade concession programme encompassing many of Pakistan’s core exports.

The EU decided to grant the concessions in response to the flooding that affected extensive regions of Pakistan in July and August 2010.

Regarding the ethanol quota, the first 18,750 tonnes will be permitted to enter the European market before the end of 2012, with the balance of 75,000 tonnes being allocated to 2013.

The trader said that while the quality of the Pakistani imports is not high, the tonnes could be used in a range of sectors, including beverage and pharmaceutical applications.

At a time of “not particularly attractive” demand in the European market, the increased availability could undermine prices, the trader said.

The last time measures of this kind were imposed “it was a disaster on the market”, the trader said.

Molasses-based 96% beverage grade ethanol prices are currently assessed by ICIS at €75-80/hl ($96-103/hl) FD (free delivered) France and Germany, while prices for 99% industrial grade are assessed at €80-84/hl FD France and Germany.

The World Ethanol and Biofuels 2012 conference takes place from 5-8 November in Munich, Germany.

($1 = €0.78)

By: Samuel Weatherlake
+44 20 8652 3214

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