Uggah: Move into biodiesel can help support prices
KUALA LUMPUR: Plans by Malaysia, the world’s second largest palm oil producer after Indonesia, to increase consumption in biodiesel may support prices, said Plantation Industries and Commodities Minister Datuk Seri Douglas Uggah Embas.
Proposals to implement the B7 programme next year will result in annual use of 700,000 tonnes of palm methyl ester, he said.
The B5 version, which involves blending five per cent of palm methyl ester with 95 per cent fossil diesel, will be extended nationwide this July, taking demand to 500,000 tonnes, he said last week.
Demand for the oil that’s used in food and biofuels climbed to the highest level since 2012 after Indonesia announced a mandate last year to increase biodiesel use, even as production fell for the first time since 1998.
Dry weather in Malaysia and Indonesia, which represent 86 per cent of global supply, has coincided with prospects for an El Nino later this year, which can parch growing areas in the two producers.
“Our move into biodiesel is also a factor that can assist the price,” said Douglas. “Now we’re only using about 200,000 to 300,000 tonnes, but by the end of next year, we should be rolling out about 500,000 to 700,000 tonnes.”
The ministry is discussing with automotive manufacturers on implementing B7 throughout the country in early next year, he added.
Palm oil on the Bursa Malaysia Derivatives surged 9.4 per cent last month.
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