Written on: September 3, 2013 by ICM
Global biodiesel production will advance to 24.7 million metric tons in 2013 as producers direct more soybean oil, the leading feedstock used for it, toward the fuel amid declining vegetable oil prices, Oil World said.
Biodiesel output will increase 6.3 percent in 2013 compared with a 5.8 percent rise last year, the Hamburg-based researcher said in an e-mailed report today. It’s advanced since 2009. Brazil’s production estimate was raised 11 percent to 2.65 million tons this year, while output in Argentina won’t fall below 1.8 million tons, as had been predicted previously.
The fuel is benefiting from its relative attractiveness as an end-product for feedstocks, or raw materials used in the industrial process, such as soybean, palm and rapeseed oil, as well as elevated crude prices, according to the researcher.
Conditions “for biodiesel producers have improved owing to a sharp decline of prices of vegetable oils and fats under the lead of soya oil,” Oil World said. “Also the appreciation of crude mineral oil prices is promoting the demand for biofuels.”
Global soybean oil used for biodiesel production is estimated to rise 2.9 percent to 7.08 million tons this year. In the U.S. soybean production for fuel is expected to increase 20 percent to 2.2 million tons in 2013. Brazil’s production is seen advancing 12 percent to 2 million tons. Argentina’s output is forecast to be 1.83 million tons, 25 percent lower than in 2012.
Palm oil, the second-biggest feedstock used for fuel output, is expected to advance 11 percent to 6.34 million tons in 2013. Rapeseed oil used for the fuel is seen falling 3.5 percent to 6.01 million tons on setbacks in the EU and the U.S., Oil World said.
Malaysia, the world’s second-biggest palm oil producer, had dry weather in June and July that may have damaged the crop feeding into the biodiesel price. The main growing areas of Johor and Perak, together accounting for almost 30 percent of national production, had “patchy” rainfall receiving less than 60 percent of the usual amount for the two months.
“If precipitation falls sharply below average in that period, the high absolute water requirements of the oil palms cannot be satisfied and their productivity may suffer,” according to the report.
Indonesia, the biggest palm oil producer, is seen raising the amount used for fuel by 16 percent to 1.8 million tons.
To contact the reporter on this story: Alex Pashley in London at [email protected]
To contact the editor responsible for this story: Claudia Carpenter at[email protected]