Date:20/01/2005 URL: http://www.thehindubusinessline.com/2005/01/20/stories/2005012001531200.htm

Back `Good potential for using vegetable oils as biofuels'

Our Bureau

"Palm diesel may be the answer to the fluctuating price and defend the floor price."

Mumbai , Jan. 19

THE potential for using vegetable oils such as palm oil and soya oil as biofuels is increasing considerably as the petroleum crude prices continue to rule high.

This was the consensus of two speakers — Mr Carlo Lovatelli, President of Brazilian Vegetable Oil Industries Association, and Dr Yusof Basiron, Director General of Malaysian Palm Oil Board (MPOB) — while making their presentations at the 74th IASC World Congress 2005.

"Petroleum's price increase tendency is a strong indication that biodiesel should become more competitive over the next few years,'' said Mr Lovatelli in his presentation on "Vision 2020 - Soya''.

Various countries such as Malaysia, the US and Brazil are investing heavily in research to gradually make this biofuel as an alternative to crude oils.

"In many countries, diesel is more expensive than petrol fuel. So more of palm oil can be disposed to diesel industry and therefore palm oil can be used as a safeguard measure against increase of petrol price," said Dr Basiron whilemaking his presentation on "Vision 2020 - The Palm Oil Phenomenon''.

"Palm diesel may be the answer to the fluctuating price and defend the floor price." The future of the palm oil industry may well hinge simultaneously on the development in the biofuel sector, he said.

Malaysia and Indonesia are the world's largest producers of palm oil and the US, Brazil and Argentina are the leading producers of soya oil.

"In the future, demand for oleochemical will continue to increase and studies at MPOB showed that palm oil can be used to produce cosmetics and high value detergents," said Mr Basiron.

Currently, Malaysia is producing 13.98 million tonnes of palm oil and another 11 million tonnes are expected from Indonesia. The good production of soyabean has depressed palm oil prices. While discussing the issue of price parity among vegetable oils, Mr Basiron said the current discount of $150 to soyabean oil and $300 to rapeseed oil must be corrected.