Wednesday Edition

03.11.09

GLOBAL

OPEC may not cut production by the previously announced 4.2 million barrels per day at the group's meeting on Sunday in Vienna. Oil officials from Saudi Arabia have said that OPEC should focus instead on making sure its members are in compliance with the previous cuts.

NORTH AMERICA

US soybean inventories before the 2009 harvest will be 12% smaller than forecast a month ago and the lowest in five years because of rising export demand, a USDA report stated.

Oxford, MS-based Encore Energy Systems has announced its biodiesel plant initiative to acquire various biodiesel production facilities that are operating under capacity. The Company recently entered into agreement with Zenergy International to provide plant management and feedstock allocation.

Oil prices slipped Wednesday as US inventories swelled and traders started to doubt whether OPEC would cut production further. Benchmark crude for April delivery dropped $1.05 to $44.66 a barrel as the EIA said crude supplies in the US climbed unexpectedly by 700,000 barrels for the week ended March 6.

SOUTH AMERICA

El Salvador plans to begin a feasibility study to produce biodiesel for the local market in March after the country received a biodiesel plant donated by Colombia. El Salvador has also purchased 18.5 mt of palm oil from Honduras.

Brazil soybean production is forecast at 57 million, unchanged from last month's estimate and down from 61 million harvested in 2008 because of drought. However, Argentina's estimated crop was lowered to 43 million tons from 43.8 million last month.

Argentine farmers yesterday came out from their third meeting with the government, unhappy about what they termed “scant” progress to solve a dispute over export duties, and called on farmers to take to the roadsides tomorrow, according to the Buenos Aires Herald.

EUROPE

The European Commission will allow a genetically modified type of rapeseed developed by Bayer AG to be imported into the EU from Canada for the next 10 years.

The Swedish government's proposed diesel tax increase of $0.045, as part of its climate plan, has drawn sharp criticism from the agricultural industry, which said the rise would be devastating to farmers by increasing annual taxation by $114 million.

The UK’s first large-scale desalination plant is due to open in 2010 at Beckton, East London and will produce water for 900,000 people by using biodiesel to power the plant.

UK-based Helius Energy is building a 7.5-megawatt power station that will burn by-products of whiskey distilling including residue and used malted barley, as well as waste wood chips. The company plans to also use by-products from US ethanol plants.

Trafigura is on track for record earnings this fiscal year, banking on its storage capacity to deliver profits in a prompt fuel market that will stay weak for months, a senior executive said. Trafigura in Singapore will also expand into marine fuels and biodiesel, Reuters reports.

ASIA / PACIFIC

The outlook for palm oil prices has improved recently as prices have recovered to around $541/mt from $378/mt last year. However, further price gains will depend on demand in India and China, the chief executive of Malaysia's IJM Plantations stated.

Palm oil stockpiles in Malaysia declined 15% to 1.56 million mt in February from a month earlier to their lowest since September 2007.

The Chinese Academy of Agricultural Engineering and Environmental and Energy Development Consulting have released a report detailing measures for China’s National Action Plan to develop renewable energy from biomass.

China Clean Energy traded up 58.4% on 192,000 shares on Tuesday, after it announced that the construction of its Jiangyin biodiesel and chemical plant remains on schedule and is expected to be completed in Q2 of 2009.

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