Feedstock prices soar; palm oil could reach $1500 in 2008, says analyst; Syntec links prices to surge in queries for its cellulosic catalysts

February 28, 2008

In Malaysia, Godrej International projects that crude palm oil will reach a price of $1400 per tonne in the September 2008 - February 2009 period. Oil World projects $1090 per tonne in 2008; LMC International forecasts $1213 per tonne in 2008m, while Prudential Bache forecasts a range of $930-$1550 per tonne.

In Canada, Syntec Biofuel said that record feedstock prices have caused a surge in inquiries for its thermo-chemical cellulosic ethanol catalyst technology. The technology has poroduced yields of 105 Gpt from waste biomass, and Syntec projects yields of up to 150 Gpt in the future. Industry standard for corn ethanol production is 92 Gpt .

Palm oil surged 6 percent to a record high earlier this week on the Bursa Malaysia derivatives exchange, with the benchmark May contract reaching $1216. Strong demand from China and India for palm oil is causing the price escalation.

At the Chicago Board of Trade, wheat traded at an all-time high of $12 per bushel, surging more than 25 percent after Kazakhstan announced it would impose export tariffs to reduce exports after consumer prices for wheat rose more than 20 percent in 2007. Wheat reserves are expected to fall to 109 million bushels, the lowest figures since the 1970s. Spring wheat rose to more than $24 per bushel, while ethanol corn use is expected to increase by 28 percent to 4.1 million bushels, pushing corn futures for the May contract to $5.5275 a bushel.

Providing more background to the reserve stock shortages, the International Food Policy Research Institute recently released a report saying that the world is eating more food than it produces, and that biofuel production runs the risk of creating social unrest. The report projected a 66 percent increase in the price of corn and a 50 percent increase in oilseed prices by 2020, attributed to biofuel production. The report also said that global cereal stocks have fallen to their lowest levels in more than 15 years.

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Written by Jim Lane · Filed Under Producer News, Research