Brazil buying more M’sian palm oil

Brazil, a major global producer of soyaoil, is buying more palm oil from Malaysia in an effort to meet its government’s mandate on the use of 2 per cent biodiesel (B2) content in diesel next year.

Starting January 1 2008, the Brazilian Government has decreed that every diesel tank must contain 2 per cent of the renewable fuel. To implement the B2 mandate, refiners in Brazil would be required to blend 800,000 tonnes of biodiesel into 38 million tonnes of ordinary diesel that it consumes annually.
While Brazil is one of the world’s largest bioethanol producer, it is now only producing less than 300,000 tonnes of soyaoil-based biodiesel per year.

“We are eight months away from the B2 target. Since Brazilian biodiesel producers cannot meet the 800,000-tonne target by the end of this year, our country has to import more palm oil to blend it with soyaoil-based biodiesel,” Brazil-based Meridian Trading Ltd chief executive officer Eduardo Pessoa de Carvalho told Business Times in an interview.

“Brazil is likely to buy more Malaysian palm oil as feedstock to be blended with soyaoil-based biodiesel because of its lower price,” he added.

Business Times