A protracted fall of oil quotations and the forecast for a high yield of oil-bearing crops weigh upon the prices for vegetable oil presenting threat to its competitiveness as raw materials for the biodiesel production.
In particular, the price index for vegetable oils of FAO reached a six-year minimum. The prices for palm and soya oil display the most significant drop. This long-term tendency is not hampered even by the tension created by rumors about the imminent drought in Brasil, which can undermine the perspectives for South American producers and exporters.
There is a strong probability that a considerable amount of cheap Argentinian biodiesel might come on the American and the European markets, which cannot but have an impact upon this situation. If this scheme succeeds in a medium-term perspective, then the biofuel field, which is the main consumer of soya oil in Europe and in the USA must be prepared for a new drop in prices.
Sergey Kozlov, the leading analyst of Ukrainian Biofuel Portal pellets-wood.com considers that this situation cannot last forever, for a price limit is defined by the production prime cost. It goes without saying that the global market of vegetable oils will not collapse even after having been near the bottom, on the whole, it is reasonable to forecast that the year 2105 will be extremely difficult for the biofuel production.
However, it is worth mentioning that the economically advanced countries will be the first to receive the blow, what concerns the regions running the deficit of energy resources, new opportunities for the alternative energy development are supposed to arise. In particular, the reduction of prices for equipment and for technological solutions will allow to facilitate the import and the implantation of such technologies.
Author: Ivan Prokhorov
