India's B5 Program Could Ease Crude Palm Oil Surplus in Malaysia

India's newly launched biodiesel mandate could potentially help ease Malaysia's crude palm oil (CPO) surplus.

India began sales of B5 biodiesel blends this week at four retail outlets in New Delhi, Vishakhapatnam, Haldia and Vijayawada marketed by state-owned petroleum companies. The move was largely based on a government initiative to reduce the country's reliance on oil and gas imports and for environmental reasons.

As India has very little oil production, most of the feedstock required will have to be imported. So far, it hasn't triggered imports, leaving market analysts unsure how much of the palm oil surplus in the Southeast Asian region will be mopped up by the increase in Indian demand.

"India can mop up the surplus in the region, but we don't know the actual consumption figures from there too, and there have been no enquiries for imports as yet," said a Malaysian producer.