Rapeseed methyl ester (RME) biodiesel prices in Northwest Europe neared a four-and-a-half year high at the start of October with winter demand and a lower-than-estimated rapeseed harvest, reports S&P Global Platts.

The price reporting agency assessed RME at US$1,135.50/tonne FOB ARA on 3 October, the highest since 24 April 2014.

“This comes as RME's prompt premium over fatty acid methyl ester biodiesel (FAME 0) has widened significantly, posting fresh all-time highs in the four trading sessions to Tuesday [2 October] when it reached US$264/tonne. FAME 0 was assessed at US$872/tonne FOB ARA on 3 October, meaning the spread eased back 50 cents to US$263.50/tonne.

S&P Global Platts said the recent strength in the RME price had significantly widened production margins, which had been under pressure earlier in the year.

With a weaker euro, there was further support for these wider production margins, potentially incentivising increased production into winter.

“Meanwhile, the near-term outlook for the market remains shrouded in uncertainty, with a decision on anti-subsidy tariffs for imports into Europe of biodiesel from Argentina expected imminently.”

The European Biodiesel Board (EBB) had urged the European Commission (EC) to adopt high provisional duties against biodiesel imports into Europe from Argentina, with a final decision by the EC due in February.

If new duties were introduced, it would close the arbitrage from Argentina into Europe for biodiesel, S&P Global Platts said.