Indonesia: Biodiesel use lets palm oil exports stall

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biodieselA jump in palm oil consumption for biodiesel in Indonesia, the world’s biggest supplier, will probably mean that shipments fail to increase this year for the first time since 2010 even as production climbs to a record, Bloomberg reported.

Exports may total 21 million metric tonnes, similar to 2013, as consumption climbs as much as 38 per cent to 11 million tonnes and production expands to 31 million tonnes from 26.5 million tonnes, according to Fadhil Hasan, executive director of the Indonesian Palm Oil Association, a producer group. The climb in biodiesel use would make the country the largest palm consumer, US Department of Agriculture data show.

The world’s most-used edible oil had its biggest advance last month since October 2013 and climbed to the highest level since 2012 as dry weather threatened crops in Indonesia and Malaysia, which represent 86 per cent of world supply, and governments of both countries required more palm to be used in diesel fuel.

“The orientation of palm oil was always for export,” Hasan said in an interview in Jakarta. “Now we see domestic consumption and biodiesel is the most significant factor if the government is really committed to the programme.”

Futures rose as much as 2.1 per cent to $872 a tonne on the Bursa Malaysia Derivatives, the highest price since September 2012.

As much as 3.4 million tonnes of palm will be used for biodiesel this year in Indonesia after Southeast Asia’s biggest economy increased the blending rate to reduce import costs and narrow the current-account deficit.

Indonesia boosted in September the amount of biodiesel blended with fuel to 10 per cent from 7.5 per cent and power plants had to blend 20 per cent from January. PT Pertamina has already secured 2.4 million kiloliters of biodiesel, 45 per cent of the 5.3 million kiloliters it’s seeking for 2014 and 2015, the state oil and gas company Pertamina said.

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Reading Time: 2 minutes

A jump in palm oil consumption for biodiesel in Indonesia, the world’s biggest supplier, will probably mean that shipments fail to increase this year for the first time since 2010 even as production climbs to a record, Bloomberg reported.

Reading Time: 2 minutes

biodieselA jump in palm oil consumption for biodiesel in Indonesia, the world’s biggest supplier, will probably mean that shipments fail to increase this year for the first time since 2010 even as production climbs to a record, Bloomberg reported.

Exports may total 21 million metric tonnes, similar to 2013, as consumption climbs as much as 38 per cent to 11 million tonnes and production expands to 31 million tonnes from 26.5 million tonnes, according to Fadhil Hasan, executive director of the Indonesian Palm Oil Association, a producer group. The climb in biodiesel use would make the country the largest palm consumer, US Department of Agriculture data show.

The world’s most-used edible oil had its biggest advance last month since October 2013 and climbed to the highest level since 2012 as dry weather threatened crops in Indonesia and Malaysia, which represent 86 per cent of world supply, and governments of both countries required more palm to be used in diesel fuel.

“The orientation of palm oil was always for export,” Hasan said in an interview in Jakarta. “Now we see domestic consumption and biodiesel is the most significant factor if the government is really committed to the programme.”

Futures rose as much as 2.1 per cent to $872 a tonne on the Bursa Malaysia Derivatives, the highest price since September 2012.

As much as 3.4 million tonnes of palm will be used for biodiesel this year in Indonesia after Southeast Asia’s biggest economy increased the blending rate to reduce import costs and narrow the current-account deficit.

Indonesia boosted in September the amount of biodiesel blended with fuel to 10 per cent from 7.5 per cent and power plants had to blend 20 per cent from January. PT Pertamina has already secured 2.4 million kiloliters of biodiesel, 45 per cent of the 5.3 million kiloliters it’s seeking for 2014 and 2015, the state oil and gas company Pertamina said.

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