Argentine biodiesel exports tanking.
Argentine biodiesel exports will slump by about 50 per cent this year as the collapse in the price of crude oil hammers demand for the alternative fuel, the South American country's leading biodiesel producers said.
A glut in global oil supplies led to benchmark Brent oil prices more than halving from June 2014 to $46 per barrel in January before a rebound to around $66 now, sharply eroding the attractiveness of biodiesel.
"The fall in oil prices is really hurting us," said Victor Castro, executive director of the Argentine Biofuels Chamber (Carbio). Castro forecast exports of Argentina's biodiesel, made from soybeans, would sink to about 800,000 tonnes in 2015 from last year's 1.6 million tonnes.
The chamber includes agribusinesses such as Bunge Ltd, Louis Dreyfus Commodities and Cargill.
Until late 2013, the European Union, which sets targets for the blending of biodiesel into fuels, was the main buyer of Argentine biodiesel. But when the EU slapped punitive duties on Argentine biodiesel exports, accusing the country of "dumping" at unfairly low prices, Argentina was forced to seek alternative markets.
Even so, Argentine biodiesel exports climbed sharply in 2014, helped by the federal government slashing export taxes on the fuel, and Argentina maintained its ranking as one of the leading suppliers of biodiesel globally.
But Castro said the loss of the EU market had left Argentine biodiesel exports more vulnerable to swings in crude oil prices.
"Since the EU unjustifiably imposed duties on Argentine biofuels, we've been selling to countries where there is demand ... if and when the price is attractive," Castro said.
Argentine biodiesel exports in the first quarter of 2015 plummeted to 90,000 tonnes, down about 58 percent on the previous year, the Argentine Association of Biofuels and Hydrogen said.
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