The Hindu Business Line : Soyaoil usage in biodiesel dipping in US

Even as producers of palm and other vegetable oils give out optimistic forecasts of rising vegetable oil use for biodiesel production, the US' soyabean oil usage in biodiesel production is on the decline.

Quoting from an analysis of Census Bureau data, the American Soyabean Association in its latest report said that biodiesel production declined in September and declined further in October. While soyaoil usage for biodiesel in August was 211 million, it fell to 201 million in September, and further down to 143 million the following month.

Biodiesel Production

The erosion in biodiesel margins appear to have discouraged biodiesel production just as biodiesel production capacity has increased from around 500 million gallons a few months ago to 700 million gallons currently, according to the report.

It is also believed that the recent behaviour of crude prices — hovering in the low $60s a barrel for weeks — has made investors turn wary. Europe seems to be concerned about rising share of palm oil.

It should surprise none if environmental concerns relating to palm oil come to the fore again. Benign weather conditions so far in South America are also contributing to the current softening tendency in global vegoil prices. Soyabean crop conditions in major origins such as Brazil, Argentina and Paraguay are reported to be satisfactory.

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