High price of edible oils slows Asian biofuel production

The high price of edible oils slows Asian biofuel production, according to a report from ICIS news by my pal Anu Agarwal in Singapore
(Disclosure: I work for ICIS: About ICIS)

“No more than 10 biodiesel plants are running in Asia,” said Chris De Lavigne, Global VP Consulting at Frost and Sullivan. And most are running are reduced capacity, he said

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Crude palm oil prices have been driven up nearly 30% since March this year as supply has lagged behind buoyant food demand from countries like India and China. Increased demand for fuel use as well as high prices of other vegetable oils like soya bean oil in the US have also pulled palm oil prices, up, said De Lavigne.

Crude oil prices at above $70/bbl have failed to make a dent in as the economics still don’t make sense as long as palm oil prices stay at current levels, said another Malaysia based biodiesel producer.

It looks like we’re all in for higher prices for food and fuel this coming year. I wonder how high oil prices would have to go under the current demand for food oils for biodiesel to become cost effective.

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