The Age. Surging palm oil prices are causing Indonesian palm oil growers to scrap or amend their plans to make biodiesel from the oil.
Sinar Mas and China National Offshore Oil have halted a $5.9 billion biofuels plan, director Rafael Concepcion said yesterday. PT Bakrie Sumatera Plantations was “redesigning” a biodiesel project, president director Ambono Janurianto said.
Palm oil prices have more than doubled in the past year. Palm oil futures in Malaysia, the global benchmark, touched a record 4,486 ringgit (US$1,409) a tonne yesterday.
“Crude palm oil is very expensive now, it’s impossible for companies to make profit if it’s used as biodiesel,” said Alhilal Hamdi, head of Indonesia’s National Team on Biofuel.
“We are postponing it indefinitely as it’s economically not feasible,” Mr Concepcion said, referring to the venture with China’s third-largest oil company. “The price of the raw material alone is already higher than the price of biodiesel.”