Food inflation and firm edible oil market drives Biodiesel market sentiments
- 21-Apr-2022 2:51 PM
- Journalist: Jung Hoon
The demand for Biodiesel has been following the uptrend in the global market, consequently affecting the market sentiments. The ongoing stress between Russia and Ukraine has impacted all commodities prices, including soybean oil, sunflower oil, and palm oil. Its easy manufacturing procedure and renewable properties have made Biodiesel the priority of major energy producers.
Biodiesel production is done by esterification of vegetable oils and agricultural feed. The increasing prices of these feedstocks have proportionally affected the production cost of Biodiesel in the global market. Asia-Pacific region is one of the major consumers of Biodiesel, and the growing awareness among people has forced the government to increase production to cater to the regional demand. Countries like Indonesia and Malaysia are the primary producers of palm oil, and any elevation in these prices directly affects the prices of Biodiesel. Primary producers in these countries have faced feed supply shortages after deforestation and high demand in the global market.
Furthermore, as an ill effect of war, the world price index (WPI) has increased in the Indian market, which led to a surge in the commodity prices, causing a price hike of Biodiesel in the Asian market. The North American region dominates biodiesel production and its market sentiments as they are the primary producers of feed corn. Adding to this, the concern for the environment has pressured the government to increase the consumption of Biodiesel in various vehicles to reduce the carbon emission in the environment and for a better future. Following the same trend, the demand from the European region has escalated to produce biofuel in the country. Besides, Neste Oyj, one of the significant refiner and biofuel producers, will collaborate with Sustainable aviation fuel (SAF) and DHL express to provide more fuel to DHL. Additionally, Austria’s OMV will enhance the refineries in Burghausen (Germany) to deduct its dependence on fossil fuels and increase biofuel production in the region. These factors will positively impact the market sentiments of Biodiesel in the global market.
According to ChemAnalyst, the prices of Biodiesel may continue to its burgeoning prices owing to high demand from biofuel consumers and energy producers. Its applications in transportation to cut down the carbon emission by vehicles into the environment will govern the market sentiments of Biodiesel.