Palm methyl ester (PME) exports by major suppliers in Malaysia and Indonesia are expected to remain low in the first half of this year due to the widespread spread of palm oil (POGO) oil, which makes biodiesel expensive to blend with common diesel, S&P Global Platts reported on January 4th.
POGO's current spread was US$$400-$500/tonne, well above the typical range of US$$50-$200/tonne, the price reporting agency said.
Malaysia and Indonesia reported weak SME exports last year and this is expected to continue in the short term, with both countries relying on domestic consumption.
High prices for vegetable oils, including palm oil, would persist in the second quarter of 2021 because of lower-than-expected production and firm demand, LMC International president James Fry told the Indonesia Palm Oil and Industry Outlook Conference. Price (IPOC 2020) in December.
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“Malaysian palm stocks will remain low until the second quarter when production increases,” he said.
On a more positive note, Malaysia's B20 blending mandate was expected to be implemented in the first half of 2021, which would increase domestic SME consumption by around 100,000 kiloliters year-on-year from the current B10 mandate to 950,000 kiloliters.
In Indonesia, the government increased its quota for the country's B30 blending mandate on December 18 to 9.2 million kiloliters for 2021 from previous projections of 8.5 million kiloliters.
This text was automatically translated from English.
Source: Oils & Fats International (OFI)
