Malaysia and Indonesia To Expand Domestic Palm Oil Biodiesel as Commodity Price Drops

oil palm close up photo

photo by Geoff Leeming

I know I finger-wag at Indonesia and Malaysia quite frequently over the way in which palm oil is cultivated. Not only are the plantations such a severe threat to Orangutan habitat that the animals could be the first great ape (in modern times) to go extinct , but biodiesel made from palm oil can have carbon emissions greatly higher than that of petro diesel. To be fair, it's not the palm oil itself that's the problem, but rather the way in which it is grown. So, other than that reflexive slap at plantation agriculture, that's as much palm oil criticism as this post gets.

Malaysia, Indonesia to Use Palm Oil Surplus for Biodiesel
In an effort to boost the price of palm oil, which at $871 per tonne is at the lowest level in 15 months, Malaysia and Indonesia have agreed to take 1.9 million tonnes off of the world market. This 'surplus' oil will be used instead to produce biodiesel for the domestic markets in the two Southeast Asian nations.
This production will be in addition to the 6 million tonnes of palm oil which the world's leaders in palm oil production have already set aside for domestic biodiesel use.

Malaysian Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said, "We have palm oil stocks which are fetching [an] unreasonable low price in the world market. So we want to increase its usage to produce biodiesel for the local market. This is only logical. If the price is low, then we might as well use the commodity ourselves."

Prices Too Low = Constrain Supply
So, constrain world supply to raise prices while increasing domestic biofuel supply. Not a bad financial plan. But it does raise the question of whether expanding palm oil production, at the expense of wildlife and the climate, is such a good idea if there is such a surplus going around?

via :: Malaysian National News Agency
Palm Oil, Orangutans
Orangutan Could be First Great Ape to Become Extinct
Orangutans' Fingers Mutilated by Oil Palm Plantation Workers: More on the Ape-Palm Oil Connection
UN Says Palm Oil Industry is Wiping Out the Orangutan
Mainstream Media Discovers that Palm Oil no Panacea

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