As expected, trade took CPO above $1000/mt, triggering the higher export levy of $375/mt for subsidizing Biodiesel blending in Indonesia. Now this will impact all palm Indonesia exports and cause trade to either substitute or ration at these levels. With PME/PSME production costs at $100/mt, this will mean that it will still cost $456/mt to continue to blend in Indonesia. Someone in Biodiesel blending supply chain in Indonesia will still have to lose money. Meanwhile in Canada, Canola production results are as predicted and 2.0 Mil MT is provisioned for exports. With China antidumping investigation following EV tariffs, there is only one place CA Canola can go, and it is to the EU without fear of trade war action by China. This, in combination with record imports of rapeseed from Ukraine in the EU as per the previous post, we can expect ample quantities to cross the pond for crushing in the EU. MATIF prices are strong, and this should keep the arbitrage open. Biodiesel trade in Northwest Europe was subdued, but we could see more activity from refiners reflecting perhaps better demand. RME premiums were well supported but relatively unchanged at +580 or $1249/mt, reflecting narrower gross replacement margins of $96/mt. In the US, D4 RINs remain sold at 0.718 c/gal, while LCFS fell back to $66/mt on ample HVO/RD supplies despite the surprise shutdown of NESTE in Singapore that will inexorably cause some significant disruptions in feedstock supplies.
Palm oil makes all boats rise & Canada makes canola export plans
Updated: Oct 26
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