Cooperation among Govts on Biodiesel Mandates Can Sustain CPO Price Rise, Says Expert

Business News/Analysis, Colombia, Feedstocks, Field/Orchard/Plantation Crops/Residues, Honduras, Indonesia, Malaysia, Marketing/Markets and Sales, Nigeria, Opinions, Papua New Guinea, Policy

December 11, 2019

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(Malay Mail/Bernama) Crude palm oil (CPO) prices would be able to sustain its current upward momentum if governments, particularly those from the Council of Palm Oil Producing Countries (CPOPC), could coordinate allocation increases under the biodiesel mandates, says palm oil expert Dr James Fry.

Fry, who is also the chairman of LMC International Ltd, said if there were cooperation among the governments in the biodiesel mandates, particularly amid the decline in palm oil stocks, the move could be the best joint policy for palm oil exporters to ensure the continuation of the uptrend seen in CPO prices currently.

“Indonesia’s mandate has been the driver behind the strong growth in biodiesel demand for the region.

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Fry said it is a lesser-known fact that Thailand’s biodiesel output has been increasing each year since 2017, supported by the government’s incentives and the country’s tax system.

“(The implementation of the biodiesel mandate in) Thailand is actually slightly ahead of Malaysia each year,” he said.

To-date, the CPOPC members are Malaysia, Indonesia and Colombia, while three palm oil producing countries, namely Nigeria, Papua New Guinea and Honduras, are expected to join the council in the near future.

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Currently, CPO prices hover between RM2,500 and RM2,600 per tonne, which are deemed as “very good” pricing among the industry players. READ MORE

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