Demand for SE Asia PME to grow when EU biodiesel ADDs end

Demand for SE Asia PME to grow when EU biodiesel ADDs end

Southeast Asia's major palm methyl ester (PME) producers expect a boost in
demand, with the possible end to the EU's anti-dumping duties (ADDs) on
biodiesel imports from Indonesia in the near term.

Export prices of PME biodiesel from SE Asia were stable in the week ended 20
July while market players waited for further developments regarding the EU
anti-dumping duties.

Workable buying-selling indications for PME biodiesel were heard at
$710-770/tonne FOB (free on board) SE Asia, stable from the previous week
amid a lack of demand from key overseas markets.

"I think everyone's waiting for news about the anti-dumping duties," said
one market source.

The EU has imposed ADDs on biodiesel from Indonesia, as well as Argentina,
since 2013. The tariffs in their current form are, however, scheduled to end
in July.

Market participants in Europe are anxious that the end of the tariffs -
imposed on producers of soybean methyl ester (SME) in Argentina and PME in
Indonesia - could trigger a flood of cheaper produce into the European
market.

PME is derived from palm oil while SME is produced from soy.

Biodiesel suppliers in Malaysia and Indonesia, the world's biggest palm oil
producers, on the other hand, expect the removal of the anti-dumping duties
to spark interest for their PME cargoes.

The EU tariffs were at 8.8-20.5% for Indonesian producers and at 22-25.7%
for Argentinian producers. It is not clear how or whether the EU plans to
review the way it assesses the duties.

The tariffs were originally due to end in 2018. But following complaints to
the WTO by producers from Argentina and Indonesia, the General Court of the
EU ruled that the ADDs were unfair and annulled them.

But export barriers remain for southeast Asian PME in the EU, which is
pushing to reduce the use of vegetable-based edible oils, which may be being
harvested from unsustainable sources.

Members of the European Parliament in April voted 640 to 18 in favour of
totally banning biofuels made from vegetable oils, including palm oil by
2020, citing the threat of deforestation.

In the US - another important market for SE Asia PME - an investigation is
ongoing on possible dumping of biodiesel from Argentina and Indonesia.

The US' Department of Commerce started the investigation in April this year
following a complaint submitted by the National Biodiesel Board (NBB) and
other industry players in the US.

In May, the US International Trade Commission (ITC) voted in favor of
continuing the probe after it found that imports from the two countries had
materially injured the US biodiesel industry.

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Link to Original Article:
https://www.icis.com/resources/news/2017/07/24/10126129/demand-for-se-asia-p
me-to-grow-when-eu-biodiesel-adds-end/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com