The EU is to reduce anti-dumping duties on biodiesel imports from Argentina within the next few weeks, sources at the European Commission told S&P Global Platts Thursday.
"Compliance with WTO rules is for the EU a cornerstone of its trade policy. Member states have now been consulted on the draft of the implementing regulation which will bring the measures against biodiesel from Argentina into conformity with our WTO obligations," a commission source said.
"Everything is on track for the EU to implement the WTO ruling, as we agreed with Argentina by September 28, 2017," the source added.
With the procedure still in place, the Commission has yet to issue a formal statement.
The move allow the reopening of arbitrage deliveries of biodiesel from Argentina to Europe from the end of the month.
The Argentinian government said earlier in the day the duties were to be cut.
The anti-dumping duties have been in place on biodiesel from Argentina and Indonesia since November 2013 following complaints to the Commission from biodiesel producers in the region. Prior to this, Argentina was the largest exporter to the European market, the government said.
The original decision on whether to cut the duties had been due July 27, but was postponed.
Liquidity on paper picked up significantly following reports of the decision with FAME 0 falling along the curve on expectations of increased supply into Europe.
"The paper curve is soaking up the bearish sentiment today," said a source as these supply expectations dominated the market.
Some market sources downplayed the impact the decision would have on the biodiesel market in Europe.
"GHGs won't be high enough for this to be a huge trade-flow -- it will be smaller than 2013 flows [prior to anti-dumping duties] but the market will still take some imports," said a source, as SME (Soybean Methyl Ester) typically has lower GHG savings than its European counterparts.
"The market had already factored in much of the duties but now it is confirmed, it is still falling," said another source as paper values fell, with Q4 FAME 0 trading at $367/mt, from $375/mt Wednesday.
Ahead of the decision, sentiment had been pessimistic in Europe for some time, illustrated clearly in the RME-FAME 0 differential which widened to a 20-month high at $121.25/mt Friday, before falling to $111/mt Wednesday.
The decision is expected to draw some criticism from European producers, as Argentinian product has the potential to cut production margins in Europe for biodiesel produced in the region.
