French producer sees price threat to EU biodiesel

By Sybille de La Hamaide

PARIS (Reuters) - The European biodiesel industry could be severely hit if the recent rally in oilseed oil prices is prolonged because it would lead to a surge in cheap imports, the head of the European Biodiesel Board (EBB) said on Monday.

However, Bernard Nicol, who is also the head of French biodiesel maker Diester Industrie, said that the impact would vary from one European country to another because some had import quotas protecting their markets.

Global agriculture commodities prices have surged over the last year, partly because of higher demand for biofuels but also due to bigger food needs in developing countries, a bad harvest in big producing countries and historically low stocks.

Prices for soybean oil, palm oil and rapeseed oil followed the trend, putting many companies at risk.

"If vegetable oils markets continue to rise, the (biodiesel) industry will be threatened," Nicol told the Reuters Global Agriculture and Biofuel Summit.

France, which has an import quota system in place, would be less threatened than other free trade markets such as Germany or Britain, he said.

"Countries with quotas are more protected because they just have to deal with higher feedstock prices but not with imports."

Countries without quotas, such as Britain, Germany, Italy, Austria and Spain, would inevitably suffer more from lasting high prices that would make it hard for EU biodiesel to compete with cheaper U.S. or South American biodiesel imports.