Thursday, October 4, 2007

Meanwhile in India: Vegetable oils may slip on biodiesel slowdown

From the Economic Times (Times of India):

Vegetable oil prices are likely to come down by next year with an expected slowdown in biodiesel production, according to London-based economic consultancy LMC International managing director James Fry.

Speaking at a seminar in Panaji, Mr Fry said there is a cyclical uptrend in palm oil production and if the US government slashes export subsidies on biofuels, the prices of vegetable oil will be moderately bearish. Biodiesel producers in the US bring their production to ports and blend 1% of fossil fuel to claim a $300 per tonne subsidy.

The fuel is then shipped to Europe where it is again subsidised through tax incentives. "The subsidies were meant to encourage biodiesel consumption in US and not to export it....MORE