Malaysia is “happy that crude palm oil is fetching high prices”, says Minister; palm biodiesel business stalled

In Malaysia, the government said that “We are happy that crude palm oil is fetching high prices“.

Palm oil has risen more than 60 percent this year, reaching an all-time high of $925 in late November before settling back to  $886 this week. Second Finance Minister Nor Mohamed Yakcop said that he believed that current CPO prices were not ” excessively high” and said that higher prices equated to higher revenues for Malaysia.

However, 86 of 91 approved biofuels plants are stalled by high prices and low margins, and the
government said it would begin to revoke biodiesel plant permits.

The government believes that producers have not taken the permitting process seriously, while producers believe palm oil prices have to climb down to $780 per metric ton before plants area feasible. Palm oil is traded as high as $921 per metric ton last month with the February delivery contract trading at $868.

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