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Page added on September 29, 2008

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Biofuel demand to lift palm oil price soon – trade

Palm oil prices are set to rise soon on higher demand from biofuel makers and stock building by some consumers, while the credit crisis will have only a small impact on the commodity, a leading industry official said.


Derom Bangun, executive chairman of the Indonesian Palm Oil Association, on Saturday said prices would increase slowly at first but 2009 would be bullish.
Bangun said the use of palm oil for fuel would rise as Indonesia and Malaysia planned to encourage the use of biodiesel.


On Friday, Indonesia issued a ministerial decree that will make the use of biofuel mandatory from 2009.


Rising prices for palm oil earlier in the year had led some biofuel producers to temporarily scale back output as it was no longer a cheap alternative to diesel, but Bangun said the fall in prices had again changed the economics of biofuels.


Reuters



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