Argentina expected to increase local and external demand for biofuels during 2012

Argentina Chamber of Biofuels (Carbio) estimates that growth in global consumption of biodiesel "will continue to rise" this year, as well as the production of the main actors of the activity (U.S., Brazil, the European Union and Argentina).

In addition dijeronque least one year is projected that 2011 was positive record worldwide due to the exponential growth experienced by the industry.

"The causes of this behavior will be mainly expansive production deficit in Europe, the strong demand for biofuels in the EU and U.S. to achieve its environmental commitments, and increased domestic demand in South America, for the enforcement of promotional policies and increased mandatory cuts and tax incentives, "explains Carbio.

The chamber said that the bloc "will remain the largest importer worldwide, increasing its purchases of biodiesel in Argentina and bioethanol in Brazil."

The report projects the third consecutive annual decline in production in the EU due to increased costs and reduced margins for rapeseed crop failure in 2011.

To that, add Carbio, add "adverse weather conditions in the planting of this year and a severe drought in Ukraine, which complicate the future supply of the main input of European industry."

In this context, Argentina "has established itself as the leader in world exports of biodiesel", but this implies an increase in domestic demand "will be detrimental to foreign shipments."

The closure of the Spanish market, in retaliation for the expropriation of majority stake in YPF, "project only a diversion of shipments and a slowdown in the overall European demand," the analysis.

Particularly for the Argentine case, the USDA (U.S. Department of Agriculture United States) projects a 60% expansion in biodiesel production, between 2012 and 2021.

"Although there will be an increase in mandatory court to increase domestic demand, the country will maintain its leadership in world exports," provides Carbio.

Factors that could change the balance planned for this year, are considered weather events (eg drought in Argentina and Ukraine), new environmental regulations, changes in the categories of biofuel in the U.S.; provisional anti-dumping measures and definitive; and entry into force of new cuts (B7 example in Brazil).

The current scenario, concludes the chamber, located in Argentina and Brazil with a "good investment landscape," despite the current overcapacity.