September 27, 2018 / 10:38 AM / 8 months ago

Indonesia biodiesel output could jump 40 pct in 2019 -official

MUMBAI, Sept 27 (Reuters) - Indonesia’s biodiesel production could rise to 7 million tonnes in 2019, up 40 percent from an estimated 5 million tonnes this year, due to a new programme to boost local biodiesel consumption, said an Indonesian ministry official on Thursday.

The world’s largest palm oil producer launched an initiative in September that requires all diesel fuel to contain at least 20 percent bio content as part of efforts to cut Indonesia’s fuel import bill, support the rupiah and increase palm oil consumption.

Palm oil is used as feedstock to make palm methyl ester, a component required to make biodiesel.

Musdhalifah Machmud, deputy minister for food and agriculture, also estimated that Indonesia’s palm oil output is set to surpass 40 million tonnes in 2019, up from a forecast 39 million to 40 million tonnes for this year.

“This year the climate is good for the fruit. We also increased productivity by putting good fertilizer,” said Musdhalifah on the sidelines of the Globoil India conference.

She also said Indonesia is seeking a reduction in India’s crude palm oil import duties to boost exports of the edible oil.

“Indonesia already asked India to reduce the import tax. We sent a letter in March, and we requested again when the Indian prime minister visited Indonesia in May,” she said.

India is the world’s largest buyer of edible oils, with palm oil making up the bulk of its imports. Indonesia is the world’s largest exporter of crude palm oil.

In March, India raised its import tax on crude palm oil to 44 percent from 30 percent and the import tax on refined palm oil to 54 percent from 40 percent.

Later in June, India’s government also raised import taxes on crude and refined soyoil, sunflower oil and canola oil to their highest levels in more than a decade to support local farmers. (Reporting by Emily Chow and Rajendra Jadhav; Editing by Tom Hogue)

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