Edible oil turns into bio-diesel
Refayet Ullah Mirdha
7/11/2006
( A friend of my sons is making his own BD from used cooking oil; running his truck, generator, tractor,ATV )
Prices of edible oil have registered an upward trend worldwide due to increase in the price of petroleum products and production of bio-diesel with palm fruits, market operators said.
Many oil import dependent countries including Bangladesh have been the worst affected by the soaring price of fuel oil.
Petroleum consuming countries are currently desperately looking for alternative sources of energy as the price of fuel is soaring beyond a tolerable limit.
The price of crude oil has now hit a record high of nearly $75.5 a barrel in international markets and it might reach $100 in the future as earlier predicted by market analysts.
This has forced the consumers, especially the European countries, to make efforts for depending more on bio-diesel than before. Bio-diesel is produced from palm and soybean seeds as an alternative. Palm tree and soybean are largely grown in Malaysia, Indonesia, Brazil and the USA.
But the use of palm fruits and soybean seeds for production of bio-gas has threatened to destabilise the edible oil market.
Bangladesh, which largely depends on imports to meet its edible oil requirement, fears a rise in the prices of palm oil in both international and local markets for the diversification of its use.
"The dependency on bio-diesel will affect the prices of edible oil in near future worldwide including Bangladesh as the country imports more than 90 per cent of its total consumption," said the country manager of the Malaysian Palm Oil Promotion Council (MPOPC) Fakhrul Alam while talking to the FE Saturday.
According to the January-March issue of the 'Global Oils and Fats Business Magazine', the market operators said the race for bio-fuel production is on, with contenders competing for a share of the projected global demand for 10.5 million tonnes in two years' time.
The magazine also said as Malaysia alone may be able to capture 10 per cent of the market, its main palm producers are revving up plans to establish bio-fuel plants.
Golden Hope Plantations Bhd will spend 100 million ringit on building four plants -- two in Peninsula Malaysia, one in the Netherlands and the largest in Bintulu Sarawak -- with an annual capacity of 150,000 tonnes, the magazine said.
The market operators said the first plant in Banting, Selangor will have an annual production capacity of 30,000 tonnes and is likely to come on stream in the current month.
The second plant Rubiatec has the production capacity to produce 60,000 tonnes of palm bio-diesel a year, sources said.
A top official of the City Group, country's one of the largest oil refining companies, said the price of edible oil in the country may go up if the palm oil and soybean producing countries including Malaysia, Brazil, Thailand, Indonesia and USA failed to produce the same keeping pace with the demand.
He said it might not affect the edible oil price in the local markets as the bio-fuel producing countries also planned to increase the plantation of the palm tree and soybean.
"The price may go up further if there is a mismatch in supply and demand," he said.
Malaysia, the largest palm producing country, has raised the plantation area of palm tree by 174,000 hectares or by 4.5 per cent to 4.0 million hectares.
Production of crude palm kernel oil grew by 12.1 per cent to 1.8 million tonnes in tandem with increased palm kernel production and crushing, by 8.3 per cent and 11.3 per cent respectively.
Fakhrul said in last calendar year Bangladesh imported 1.1 million tonnes of edible oil including palm, soybean, rapeseeds and mustard oil at a cost of at least $ 400 million.
Of the total consumption of edible oil, 65 per cent accounts for palm oil, 20 per cent soybean oil and 15 per cent rapeseeds and mustard oil, he said.
According to the statistics, prices of edible oil have registered a hike by $25 per tonne in the international markets over the last 15 days due mainly for higher prices of diesel oil and production of bio-fuel, sources said.
Soybean oil was selling at $548 per tonne compared with its $530 per tonne in the international markets while its local price was Tk 1640 per maund compared with its Tk 1610 per maund 15 days ago.
Palm oil was selling at $ 460 per tonne compared with its previous rate at $ 430 per tonne in the international markets while its local price was Tk 1520 per maund compared with its previous rate at Tk 1500 per maund 15 days ago, Fakhrul said.
According to the latest available statistics of the Bangladesh Bank, the country imported crude and refined edible oil worth $ 416.44 million in July 2005-May-2006 period.
Fakhrul said the demand for bottled edible oil in the country is 15,000 tonnes per year, of which 97 per cent is soybean oil and 3.0 per cent palm oil.
The consumption of oils and fats has witnessed a tremendous increase in last eight years, sources said adding that in 1996, the consumption of total oils and fats in the country was 0.60 million tonnes, which increased to 1.1 million tonnes in 2004.
The consumption of palm oil in 2004 increased by 26 per cent compared to that of 2003 calendar year, sources said adding the same trend has been continuing over the last few years in this connection.
In 2004, the global palm oil production was 29.7 million tonnes, an increase of 6.5 per cent from 27.9 million tonnes in 2003, sources said adding that Malaysia remained the largest producer with a 47 per cent share compared with 48 per cent in 2003 year.
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