Malaysian Covid lockdown may slash UCO supplies further

Malaysia's return to a full two-week lockdown from today may worsen the scarcity of Malaysian waste-based biodiesel feedstocks.

Prices of used cooking oil (UCO) flexitank exports are already at record highs of $$1,110-1,150/t fob because of tight supplies and firm demand from renewable diesel producers.

Kuala Lumpur implemented its third round of movement control orders (MCOs) last month to curb the spread of Covid-19.

With no restaurant dining and limited travel, UCO collections may be cut by as much as 50pc of pre-pandemic levels as was the case during the first wave of infections and when MCOs were introduced last March.

Net UCO exports slumped by 77pc to 26,000t last year from 113,000t in 2019.

Palm oil production is considered essential, so output of the vegetable oil and off-shoot palm oil mill effluent should be unaffected, though suppliers said it may take a few days for operations to normalise.

By Amandeep Parmar