Dateline 2020-03-10, FMT:
Shockwaves from the oil price crash have hammered Asia’s biofuels industry, upending optimism over its future.
Crude’s nosedive erases any chance of discretionary blending of palm oil with diesel and drastically inflates the cost of government mandates.
“These are unprecedented times,” said Alvin Tai, an analyst at Bloomberg Intelligence.
Biofuels, such as a blend of diesel with palm, need to be attractively priced compared with fossil fuels to encourage consumption, and that often requires subsidies.
The almost 25% plunge in Brent crude oil on Monday, therefore, made palm oil’s competitive position dramatically worse.