- Last week, the Indonesia Energy Ministry set a new biodiesel pricing formula. Palm-based biodiesel price for domestic market will be based on Mean of Platts Singapore (MOPS) plus transport costs. Previously, the price was below MOPS.

- The new biodiesel pricing formula will allow biodiesel producers in Indonesia to cover their transportation costs but not CPO.

- Previously, the vice president of Indonesia’s Biofuel Producers Association was reported as saying that biodiesel price should not have anything to do with MOPS. Instead, using CPO export price as the base would be clearer.

- Jakarta Post reported that the amount of biodiesel blended into diesel fuel in Indonesia in 1Q2014 was not close to the quarterly target as poor infrastructure and a prolonged procurement tender had gotten in the way.

- Only 350,000 kilolitres (123,601 tonnes) of biodiesel were blended into diesel fuel, far below a quarter of the government’s full-year target of four million kilolitres (1.4mil tonnes).

- A government official attributed the low biodiesel usage partly to the lack of blending facilities particularly in the eastern part of Indonesia. He said that biodiesel tenders are targeted to be completed in May or June.

- Pertamina is currently working on tenders for 850,000 kilolitres (300,175 tonnes) of biodiesel to be distributed to Sumatra, Nusa Tenggara, Kalimantan, Sulawesi and Papua. State-owned electricity firm, PT PLN is also working on auctions for the procurement of 123,000 kilolitres (43,437 tonnes) of biodiesel.

- Soybean price slid early last week but rebounded at the end. Although there were concerns that demand will decline in China, soybean price rose last Friday on basis spreads as traders bought more nearby contracts compared with deferred ones. According to an industry expert, there were reports saying that China will be auctioning three million tonnes of state soybean reserves soon. This is a third of total inventories.

- Finally on 22 April, Australia’s Bureau of Meteorology said that six of its seven models suggest El Nino thresholds may be exceeded as early as July 2014.

- On 21 April, USA’s Climate Prediction Centre said that while El Nino neutral conditions are favoured for the Northern Hemisphere in spring 2014, chances of El Nino are increasing during the remainder of the year, exceeding 50% by summer.

Source: AmeSecurities