KUALA LUMPUR, March 22 (Xinhua) -- The European Union (EU) scrapping duty on Indonesian biodiesel may give a boost to palm prices as palm oil demands in biodiesel seem to rise, an industry analyst said Thursday.
EU has removed import duties on biodiesel import from 13 Argentine and Indonesian producers this week following the end of legal proceedings at the European Court of Justice (ECJ).
"We are not surprised by the news as the World Trade Organization (WTO) has ruled in favor of Indonesia on this issue and recommended changes to the measures in January," said Alan Lim of MIDF, a Malaysian research firm, in a report Thursday.
To him, the final decision by ECJ, which is the highest court in the EU, is positive to crude palm oil price as he expects higher demand for palm oil in the biodiesel segment.
"In the long run, this should lead to lower palm oil inventory level," he added.
Lim also maintained his positive view on the plantation sector due to improved demand outlook for palm oil in 2018.
"We believe that the good global economy growth in 2018 should lead to higher consumption per capita," he said.
Indonesia plans to replant up to 165,000 hectares of oil palm plantation land this year.
