The EU 27 imported in 2024 just 1.365 million metric tons. Palm is being substituted out of the trade in Europe just like it has been in the US. This is not a battle lost, but the palm trade war has been lost. The bean oil-palm oil spread screen spread has finally recovered from its low of -$205/mt at the end of December to the current -$54/mt. The immediate entry of Indonesia as a full member of BRICS also shows how much damage this trade war has accomplished geopolitically. Indonesia will continue to push for a 40% biodiesel blend, but this will be more a Q4 2025 event to continue to support palm prices. The impact of this blending in Indonesia is significant for the gasoil trade as Indonesia used to import nearly 3 million MT per month of high-speed diesel at its heights and now it imports close to 1 million MT at its low. Malaysia is now considering a more serious blending rate of biodiesel, but the calculations are not the same as for Indonesia, which was a significant importer of diesel. The market has taken almost $200/mt off palm prices since early November 2024, while bean oil has dropped $50/mt in the same period. I still think that bean oil is not completely done on the downside, but with CNY and South American weather market as well as strong gasoil, we could hold at current levels still through early February. However, this writer thinks we need to explore the possibility of trading at 30c/lb on bean oil futures before any rally is possible. Meanwhile, D4 RINs in America are stable at 0.618 c/gal despite excess production beyond RVO in 2024. No 45z guidance yet, so renewable diesel prices made from UCO have dropped 46 c/gal ($159/mt) this new year to 4.92 c/gal. In Europe, gross margins suffered a bit on RME to settle at $83/mt. SAF prices in Europe are $1882/mt as the mandate has begun in both the EU and UK.
