The European Biodiesel Prices Descend Amidst Falling Feedstock Costs

Germany- Biodiesel prices have observed a drop in the European market as the feedstock palm oil prices plunged to a 20-month low in the international market. Indonesia and Malaysia have reduced palm oil prices amidst the demand from European regions. The need for renewal and clean biofuel pressured the European Union countries to increase the production of Biodiesel in their respective countries. The prices of Biodiesel in Germany declined by 1% and ranged between USD 2410 to 2580 per MT, FD Hamburg this week.

The roller-coaster ride of the feedstock prices began four months ago due to the food grain shortage, the threatening financial crisis in the international market, and the Indonesian government's ban on palm oil export. Edible oil prices skyrocketed in that period. The ban was later eased to cater to the demand from the international market. To cope with the escalating inflation in commodity prices and stabilize the recession in the economy, Malaysia and Indonesia reduced the palm fruit and palm oil prices. Rivalry behavior among the countries and the urge to increase their export, feedstock prices, and palm oil prices decreased. With insistent discounting, Indonesian producers are regaining their business from Malaysian competitors. These countries are pressuring the European countries to increase the import of feedstock and palm oil required to produce Biodiesel. 

Natural gas prices are anticipated to rise further in the European region after the ban on the export of gas from Russia. With the rise in the natural gas and crude oil prices, the demand for the production of Biodiesel also raised in the European market. As per ChemAnalyst, the prices of Biodiesel may continue to decline in the regional market as the European Union is planning to restrict the use of palm oil and soy oil as the feedstock for Biodiesel production.