Biodiesel Prices went Through an Oscillatory Trend due to an Unstable Supply Demand

The global market has experienced a slight decline in the rates of biodiesel during the end of the fourth quarter of the year 2023. The reduction in feedstock prices, decreasing demand from downstream industries, and increased feedstock production altogether are contributing to the decline in the rates of biodiesel in the global commodity market.

The market is primarily affected by the low-price trends of the feedstocks, including used cooking oil, soybean, and Rapeseed oil. Moreover, the gradual reduction in the demand from the downstream industries, along with the high production rate by major producers, played a vital role in the unstable and fluctuating price trends of biodiesel during the final weeks of December 2023. The limited importing activities from the Asian market due to ongoing disputes over countervailing duties had contributed to the reduction in the market prices, as well.

The European market had also witnessed a downturn in the momentum of the rates, with a decline of approximately 9.20% in the last week of December 2023. Amid the declining price trends of Biodiesel in Europe, European biodiesel producers made a claim stating that the biodiesel imported from China has slashed domestic production.

The producers came up with evidence indicating that the imported commodity from China is sold at artificially low prices. Taking measures towards the filed complaint, the European Union Countries had initiated an anti-dumping investigation into biodiesel imports from China. However, the rates remained declining with the decrease in the prices of Rapeseed oil in the European market. This contributed to the high-end production cost for domestic biodiesel manufacturers.

Soybean oil is considered as one of the primary feedstocks used in biodiesel production. The rise in the prices of soybean oil indirectly affected the cost of palm oil in Southeast Asia. However, the rates of biodiesel remained stable throughout that week due to the increasing demand in the Southeast Asian market. However, the attack on a Norwegian Commercial tanker by the Yemen Houthis disrupted the overall supply chain, causing a sudden surge in the spot prices.

According to Procurement Resource, the global market for biodiesel remained inconsistent, marking unstable notes throughout the final weeks of December 2023. The rates kept oscillating due to various factors, including geopolitical issues, unstable demand-supply rates, and high production rates. These factors all together contributed to a downturn in the price trends of biodiesel in the global market.