Biodiesel Prices kept on rising along with the Prices of Edible Oil Globally
- 06-Apr-2022 3:59 PM
- Journalist: Harold Finch
In the Asian-Pacific market, Biodiesel prices witnessed increment, accompanying the prices of edible oils. The ongoing conflict between Russia and Ukraine has increased the prices of sunflower and other edible oil, affecting Biodiesel prices proportionally. According to ChemAnalyst data, the prices of Biodiesel were observed at USD 2230/ton, FAME the USA, on 1st April 2022.
Biodiesel is a biodegradable fuel produced from vegetable oils, where Indonesia and Malaysia are the primary producers of palm oil, which can act as an alternative for Biodiesel production. Apart from sunflower, palm oil and soybean are the feedstock required to produce Biodiesel. Furthermore, Indonesia and palm oil and its expanded costs are the main drivers of the cost climb. Indonesia has implemented export restrictions on palm oil which elucidated that the local manufacturers should save 30% of their arranged commodities available locally. This policy has created a supply chain imbalance in the Asian market, forcing the manufacturers to increase production costs. As a ripple effect, Biodiesel prices spiked in the Asian market.
Apart from that, US is the major player in Biodiesel production, as the feed required to produce Biodiesel is yielded in the USA. After the conflict between Russia and Ukraine, the trade route has been affected. Moreover, sunflower prices skyrocketed in the regional market, which proportionally escalated the Biodiesel production cost, leading to hiked prices. Biodiesel prices have also witnessed growth in the European market after the conflict between Russia and Ukraine. Biodiesel acts as an alternative for energy resources and has proven better and more effective.
As per ChemAnalyst data, Biodiesel prices may continue to follow the uptrend globally, accompanying the escalating prices of feed, sunflower, palm, sugarcane, and others. The ongoing tension between Russia and Ukraine will affect the Biodiesel production cost, resulting in hiked product prices.
