Brazil to import palm oil to meet biodiesel mandate

Brazil plans to step up its purchase of palm oil from Malaysia in order to meet a government mandate for a 2% biodiesel (B2) content in diesel starting Jan. 1, 2008.

Apr 10th, 2007

Eric Watkins
Senior Correspondent

LOS ANGELES, Apr. 10 -- Brazil plans to step up its purchase of palm oil from Malaysia in order to meet a government mandate for a 2% biodiesel (B2) content in diesel starting Jan. 1, 2008.

To comply with the mandate, Brazilian refiners must blend some 800,000 tonnes of biodiesel into 38 million tonnes of diesel fuel by yearend. But Brazil currently is producing less than 300,000 tonnes/year of soyaoil-based biodiesel, a shortfall of 500,000 tonnes, said Eduardo Pessoa de Carvalho, chief executive officer of Brazil's Meridian Trading Ltd.

Because Malaysian palm oil's price is lower, Brazil likely will buy more of it as feedstock to blend with its soyaoil-based biodiesel, Carvalho said.

In 2006, Brazil bought 33,222 tonnes of Malaysian palm oil, more than twice the 14,620 tonnes purchased in 2005.

Contact Eric Watkins at hippalus@yahoo.com.

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