Demand for SE Asia PME to grow when EU biodiesel ADDs end

Author: Izham Ahmad


palm fruits 24 July

SINGAPORE (ICIS)--Southeast Asia’s major palm methyl ester (PME) producers expect a boost in demand, with the possible end to the EU’s anti-dumping duties (ADDs) on biodiesel imports from Indonesia in the near term.

Export prices of PME biodiesel from SE Asia were stable in the week ended 20 July while market players waited for further developments regarding the EU anti-dumping duties.

Workable buying-selling indications for PME biodiesel were heard at $710-770/tonne FOB (free on board) SE Asia, stable from the previous week amid a lack of demand from key overseas markets.

“I think everyone’s waiting for news about the anti-dumping duties,” said one market source.

The EU has imposed ADDs on biodiesel from Indonesia, as well as Argentina, since 2013. The tariffs in their current form are, however, scheduled to end in July.

Market participants in Europe are anxious that the end of the tariffs - imposed on producers of soybean methyl ester (SME) in Argentina and PME in Indonesia – could trigger a flood of cheaper produce into the European market.

PME is derived from palm oil while SME is produced from soy.

Biodiesel suppliers in Malaysia and Indonesia, the world’s biggest palm oil producers, on the other hand, expect the removal of the anti-dumping duties to spark interest for their PME cargoes.

The EU tariffs were at 8.8-20.5% for Indonesian producers and at 22-25.7% for Argentinian producers. It is not clear how or whether the EU plans to review the way it assesses the duties.

The tariffs were originally due to end in 2018. But following complaints to the WTO by producers from Argentina and Indonesia, the General Court of the EU ruled that the ADDs were unfair and annulled them.

But export barriers remain for southeast Asian PME in the EU, which is pushing to reduce the use of vegetable-based edible oils, which may be being harvested from unsustainable sources.

Members of the European Parliament in April voted 640 to 18 in favour of totally banning biofuels made from vegetable oils, including palm oil by 2020, citing the threat of deforestation.

In the US – another important market for SE Asia PME – an investigation is ongoing on possible dumping of biodiesel from Argentina and Indonesia.

The US’ Department of Commerce started the investigation in April this year following a complaint submitted by the National Biodiesel Board (NBB) and other industry players in the US.

In May, the US International Trade Commission (ITC) voted in favor of continuing the probe after it found that imports from the two countries had materially injured the US biodiesel industry.

Focus article by Izham Ahmad

SE Asia PME 24 July

Pictured above: A worker loads palm fruits onto a truck at a plantation on Bintan Island, Indonesia. (Source: KPA/Zuma/REX/Shutterstock)