Biodiesel exports to rise as palm oil prices fall
Business Times
Wednesday, August 20, 2008
By Ooi Tee Ching
Yesterday, the third month benchmark palm oil futures closed at RM2,436 per tonne, 46 per cent off from its all-time high of RM4,486 per tonne in March.
The price of palm oil traded in the futures market has been falling due to an oversupply of vegetable oils worldwide. The price drop is worsened by buyers from consuming countries, in recent weeks, attempting to renegotiate import contracts and defer their deliveries.
“We should see higher exports of biodiesel as palm oil prices have come down significantly. But this is subjected to palm oil satisfying the food sector first before the excess can be channelled for biodiesel,” said Plantation Industries and Commodities Minister Datuk Peter Chin.
“If feedstock prices remain bearish and crude oil prices remain at current levels, we could see a 50 per cent growth from last year’s 95,013 tonnes,” he told Business Times in a telephone interview yesterday.
“Already, the monthly exports are averaging more than 12,000 tonnes,” he added.
Since April, the average export price of palm methyl ester has improved from RM3,255 per tonne to RM3,902.
On local usage of Envo Diesel, Chin said the government prefers to roll out the programme on unsubsidised sectors first.
“It will depend on whether palm oil prices remain bearish. When we implement usage of Envo Diesel for local consumption, it has to be tried on unsubsidised sectors like construction and transportation before we can consider mandating it at all petrol stations across the nation,” he said.
August 20th, 2008 at 6:34 pm
Personally, i think that this is, essentially, a positive development for the Malaysian biodiesel sector. Indeed, if matters are astutely managed, this could boost the Malaysian economy considerably.
But that is the point: for maximum development, matters must be correctly managed and commercialised to generate maximum revenue.
More so in Southeast Asia, a region with a history of failure and stagnation, except in Singapore and perhaps Malaysia. The government must immediately begin an extensive R&D project to make palm oil a motor fuel. This is especially needed as world petroleum reserves are fast being depleted and corn ethanol has come under fire for environmentally unfriendly practices.
It is my sincere hope that Malaysia can play her cards right, as this is vital for the future of Malaysia and her people.