Indonesia plans to increase the palm oil-based fuel content in its biodiesel from 30% to 35% from July 20, Dadan Kusdiana, a senior official at the Indian Energy Ministry, said on Friday.
The world’s biggest palm oil producer is struggling to reduce inventories of the product, which have surged after a three-week ban on exports. The suspension, which ended in May, was aimed at controlling domestic cooking oil prices.
The high stock has weighed on palm fruit prices, drawing criticism from farmers who are in the middle of the peak season.
Dadan said the increase in the ratio, known as “B35”, would create an additional demand of 727,804 KL of fuel palm oil this year, bringing annual consumption to 10.88 million KL. Consumption until July was estimated at 5.78 million KL.
The ministry also announced tests for the B40 fuel.
“While we await the results of the B40 test, the government will implement B35,” Dadan said in a statement.
Senior Minister Luhut Pandjaitan estimated this week that an additional 2.5 million tonnes of palm oil could be absorbed if Indonesia implemented B40.
Other efforts the authorities are considering to reduce inventories include lowering the palm oil export tax to stimulate exports.
Source: CNN Brasil
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