Malaysia doubles 2008 biodiesel export forecast

Kuala Lumpur, Malaysia | October 29, 2008 by D-8 Secretariat

If the spread between the selling price of palm methyl ester and the feedstock holds, biodiesel exports should continue at robust pace, says the Malaysian commodities minister

Malaysia has raised its 2008 biodiesel export forecast to 200,000 tonnes, more than double that of last year's 95,013 tonnes, as reported by Malaysian media sources.

"Export of biodiesel is picking up in volume and speed. The spread between the selling price of palm methyl ester and the feedstock is allowing biodiesel producers to make some money," said Plantation Industries and Commodities Minister of Malaysia, Datuk Peter Chin.

"So far, we have shipped out some 128,000 tonnes (of biodiesel). If the spread holds, biodiesel exports should continue at the current robust pace. We could possibly more than double (the number) from last year," he told Business Times in a telephone interview yesterday.

Earlier, the minister had estimated methyl ester (biodiesel) exports to grow by one-and-a-half times from last year.

The Malaysian Palm Oil Board (MPOB) said Malaysia exported 128,527 tonnes of biodiesel in the first nine months of this year.

The third-month benchmark crude palm oil price traded at RM1,652 while crude oil on Nymex traded at US$74 (RM261.22) per barrel.

Meanwhile, at the Oils and Fats International Congress (OFIC) 2008 in Kuala Lumpur yesterday, Deputy Plantation Industries and Commodities Minister Senator Kohilan Pillay said that of the 91 biodiesel licences issued to date, 15 plants with a combined 1.6 million tonnes capacity have been built. Out of that, five are actively producing and exporting methyl ester.

Organised by the Malaysian Oil Scientists' and Technologists' Association (Mosta) and publisher Oils and Fats International, OFIC 2008 carries the theme "Global Availability and Sustainability of Oils and Fats".

Also present was Malaysian Biodiesel Association deputy president Unnikrishnan Ramachandran Unnithan.

"We are optimistic of achieving the 200,000-tonne target as many biodiesel exporters have, since June, ramped up production," he told Business Times.

Unnikrishnan, who is also Carotino Sdn Bhd executive director, said his company's biodiesel plants are currently operating at 90 per cent capacity.

Its plants in Johor have a capacity to produce 180,000 tonnes of biodiesel per year, both summer and winter grade.

"Most of our biodiesel shipment go to Europe, although we also sell small quantities to Asia Pacific," he said.

Process engineer Desmet Ballestra (M) Sdn Bhd, one of the 65 exhibitors at OFIC 2008, said it is getting more jobs to build specialty fats and oleochemical plants.

"In the last two years, the focus was biodiesel. However this year, it is specialty fats and oleochemicals due to excess biodiesel capacity in Malaysia," said Desmet Ballestra managing director Khoo Kiak Kern.

"Existing plants only needed to ramp up production to leverage on the spread between biodiesel selling price and feedstock cost," he added.

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