Indonesia considers raising biodiesel blending mandate
Indonesia is considering raising its biodiesel blending mandate to 35pc from 30pc and relaxing palm oil export restrictions to help boost prices.
Indonesia's minister for maritime affairs and investment Luhut B Pandjaitan has asked the trade ministry, state-owned oil firm Pertamina and the country's oil palm plantation fund management agency to review the viability of flexibly applying B35 or B40 in the second half of this year to control crude palm oil (CPO) prices.
Jakarta has previously discussed raising the mandate to B40 but not until 2025. Domestic producers supported the move saying current output capacity should be enough to fulfil the higher volumes required.
The minister also approached the trade ministry with a plan to increase the export multiplier to seven times the volume of domestic sales from five currently to help clear inventories and boost fresh fruit bunch (FFB) prices.
"Currently the price of cooking oil has reached 14,000 rupiah/litre ($0.93/l) in Java-Bali, so we can start relaxing policies on the upstream side carefully to accelerate exports and improve the price of FFB at the farmer level," Pandjaitan said.
Jakarta has struggled to restrain palm oil prices this year, which initially spiked to record highs because of global vegetable oil tightness and the Russia-Ukraine war. They subsequently slumped following a series of overzealous government control measures.
More than 270,000t of cooking oil was distributed under the current domestic market obligation by the end of June. The government allocated 3.41mn t of exports last month during a transition and acceleration programme after an export ban was lifted in late May.
Indonesia lowered July's domestic biodiesel price to Rp11,070/l from Rp13,033/l in June after domestic palm oil values dropped to Rp11,479/kg from Rp13,743/kg.
