Crude and Refined Palm oil global market information
Fuel for CHP / Co-firing industry
The key drivers of EBITDA for biodiesel & Co-firing plants should be (i) improved utilization of the capacity of the plants, (ii) the introduction of cheaper biodiesel feedstock (palm oil) by the, (iii) slightly higher contract prices for biofuels, heating & electricity.
The cost of rapeseed oil, soyabean oil or palm oil feedstock accounts for around 80–95% of the operating cost of the biodiesel process and in the same rank for co-firing unit. A substantial increase in the production capacity and number of biodiesel manufacturers would create greater competition for the supply of vegetable oil feedstock, leading to upward pressure on prices.
Biodiesel and co-firing / cogeneration plant should switch from 100% rapeseed to a mix of 80% rapeseed, 20% soya or more efficiently to a mix of 60–70% palm oil and 30% soya bean oil. Refined palm oil or crude palm oil are the right solutions in today market to stay competitive.
Even without biodiesel, demand for palm oil would still be driven by the food segment. In Europe , there is less rapeseed for food purposes as more rapeseed are being used as feedstock for biofuel. Palm oil can come in to fill in the gap left by rapeseed in the food segment.
In terms of production volume, palm oil is the world's second most produced vegetable oil after soybean oil. Palm oil exports come predominantly from Malaysia and Indonesia and these two countries can be expected to maintain their dominant position in exports of oils and fats, accounting for 45% of total trade.
Demand for palm oil from China is expected to remain positive, supported by the food requirements of a growing population. Currently, demand for palm oil from the biodiesel segment in China is still negligible.
Global palm oil stock-usage ratio will be reduced significantly once these biodiesel plants come on stream, leading to an upward spike in palm oil prices. Global demand for oils and fats will surpass supply in 2007, taking the global stock-usage ratio down to 10.0% in 2007, almost the lowest level since 1980.
Sourcing of palm oil & refined palm oil from trustworthy producers or traders is a key of success. Biodiesel and co-firing companies are the clear potential winners if only if they are well supported by traders and brokers. The risk to stay alone biodiesel & co-firing, cogeneration, CHP plants are the most vulnerable, as raw material prices are rising but mineral diesel prices will increase in the short term.
How to import crude palm oil or refined palm oil in EU :
Option n°1 Work directly with local producer in Asia or Africa
Option n°2 Work with broker and trader
Example european broker for refined & crude palm oil : GREENEA www.greenea.com
Crude and refined palm oil have not only economics advantage for fuel for CHP / co-firing industry but also have the better power properties than rapeseed and soya
Palm oil itself can be used in plants as an ignition fuel, replacing fossil-derived heavy fuel oil. In this way, the CO2 emissions that would have been created by the fuel oil (approximately 3 tonnes of CO2 per tonne of heavy fuel oil) are avoided.
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