The EU announced that it will impose a five-year countervailing duty on biodiesel imports from Indonesia. The EU has tentatively imposed an additional 8% to 18% countervailing duty on biodiesel imports from Indonesia. This may affect Indonesia ’s biodiesel consumption policy, which is closely related to palm oil stocks.
It is understood that after nearly a decade of rapid development, palm oil has surpassed soybean oil and has become the largest vegetable oil in terms of production and consumption. Global output has increased from 24 million tons in 2000 to nearly 70 million tons in 2018. The price has also continued to fall. The domestic palm oil futures price has fallen from a maximum of 12,506 yuan/ton in 2008 to about 4,500 yuan/ton in the near future, a decline of more than 60%. Palm oil production continues to increase in 2019. The Indonesian Palm Oil Association predicts a 10% increase in output in 2019. If calculated based on 40 million tons, the annual output will increase by 4-5 million tons. After the raw fuel blending rate is increased, Indonesia will increase consumption by 4 million tons. Malay increased by 200,000 tons. In this way, most of the new palm oil production in the two countries will depend on biodiesel digestion, especially Indonesia’s raw fuel consumption to curb inventory. Therefore, Indonesia’s biodiesel production and consumption have become the main factor affecting inventory…
The biodiesel policy promulgated by the Indonesian government since 2013 has gradually increased the blending rate, from less than 10% in 2013 to 20% in 2018, and even plans to rise to 30% after 2019. The second is that the time of policy promulgation is often at the beginning of the year or nearby. For example, the policy was announced four times on January 1 of the calendar year, once on November 1, and once on February 1. It is well known that palms are from the end of the year to the beginning of the next year. At the time when oil inventories are the highest, the biodiesel policy is announced at this time. The government hopes to boost market confidence and stabilize palm oil prices during the off-season.
Relevant Indonesian policies are closely related to palm oil stocks. September 2018 is also proof. In May 2018, Indonesia’s domestic palm oil stocks exceeded 4 million tons, and in July it reached a record 4.9 million tons. In August, it remained at a high level of 4.6 million tons. Inventories exceeded 4 million tons for four consecutive months. Pressure forced the Indonesian government to announce the mandatory use of B20 biodiesel on September 1. When analyzing the palm oil market, when the inventory is large, the possibility of the government to announce the biodiesel policy should be considered.