Indonesia unlikely to meet 2014 biodiesel mandate -industry official : Reuters Indonesias use of palm oil for blending into biodiesel is likely to fall 41 percent short of its target due to a rally in prices of the vegetable oil, a senior industry official said. A lower palm oil take-up by the worlds top producer could help put a lid on benchmark prices that surged to a 17-month top of 2,860 ringgit ($870) on Monday amid crop damaging dry weather in Southeast Asia. Indonesia is expected to use 2 million tonnes of palm oil for biodiesel in 2014, against the initial target of 3.4 million tonnes, said Fadhil Hassan, executive director of the Indonesian Palm Oil Association. It is difficult to realize all of it, he told Reuters on the sidelines of an industry event in Kuala Lumpur on Wednesday. The problem is pricing. Jakartas energy ministry has raised the minimum bio content in diesel to 10 percent, up from levels of 3-10 percent. For the power industry, the minimum was doubled to 20 percent. But there are concerns Indonesia will find it hard to meet its timetable to burn more palm-based biodiesel, hampered by the demands of distributing the fuel to its thousands of islands and by reluctance to fill up tanks with biofuel. PT Pertamina has secured 2.4 million tonnes of palm biodiesel for 2014, although the Indonesian state energy company will be able to use only 2 million tonnes, Hassan said. Indonesia is, however, set to emerge as the worlds biggest consumer of palm oil this year, using more than 9 million tonnes, industry officials said. The country is likely to finish 2014 with ending stocks of 1.8 million tonnes, compared with an estimated 1.8 to 2.2 million tonnes at the end of 2013, Hassan said. He also said that palm oil prices, which are currently trading at 2,847 ringgit, have been underpinned by dry weather in large parts of Southeast Asia. Its been dry for the past 1-2 months in Sumatra, where 70 percent of the oil palm production comes from, he said.
Posted on: Wed, 05 Mar 2014 07:05:00 +0000
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