- Platts reported that a technical committee within Indonesia’s Government has proposed a new biodiesel reference price formula that will be put before the country’s parliament for a vote.

- The new formula – the price of CPO plus a margin of US$188/tonne (RM667/tonne) was proposed during a technical committee meeting last Wednesday.

- Biofuel Producers Association (APROBI) said that the formula has to be approved in the general assembly. The timing is unknown but it will be after all the Ministries have completed their hearing with the technical committee. Currently, the price of biodiesel in Indonesia is based on Mean of Platts Singapore 0.25% gasoil assessment plus 3.48%. Breakeven for producers range between US$723-753/tonne.

- Bloomberg reported that Indonesia’s Parliament Budget Committee has approved the biodiesel subsidy of Rp4,000/liter. The Government will allocate 64.67 trillion rupiah (US$5.1bil) of fuel subsidy and 64.84 trillion rupiah (US$5.1bil) of electricity subsidy this year. The Committee has also approved subsidised diesel volume of 17.05mil kilolitres.

- Also, it was reported in the Jakarta Post last week that the volume of subsidised biodiesel would be reduced from the proposed 3.41mil kilolitres (1.2mil tonnes) to 1.7mil kilolitres (600,349 tonnes).

- APROBI said that Pertamina may consume 1.7mil kilolitres (600,349 tonnes) of biodiesel under B10 this year. The rest of biodiesel consumption may come from other companies such as Shell and Patra Niaga.

- Bloomberg cited Solvent Extractors’ Association of India as saying that the import duty on crude vegetable oils should be raised from 7.5% to 10% while refined palm oil’s import duty should be increased from 15% to 25%.

- The President of the Association said that the tax differential between crude and refined vegetable oils should be 15 percentage points. Currently, the tax difference is 7.5 percentage points. In December 2014, India raised the import duties from 2.5% to 7.5% for crude palm oil and from 10% to 15% for refined palm oil in response to lobbying from the refiners.

- Last week, soybean prices rose as crops in Brazil may be affected by the dry weather. Bloomberg quoted an industry expert as saying that drought had damaged soybeans in parts of Brazil. Also, USDA said that soybean crops in Brazil are estimated at 93mil tonnes in 2015F versus the previous forecast of 95.5mil tonnes.

Source: AmeSecurities