07/09/05 (Gulf Daily News) HAMBURG - Record mineral oil prices arelikely to greatly increase demand for palm oil, soyoil and other vegetableoils for biofuels, Hamburg-based oilseeds newsletter Oil World said.

"Substitution of crude mineral oil with palm oil, soyoil or other oils andfats is now additionally stimulated and it is already occurring at anincreasing pace, although obviously not yet fully acknowledged by themajority of market participants," it said.

"The potential substitution could be so big that available stocks ofvegetable oils could be disposed of in no time."

It added: "The key message is that with recent price changes substitutionwith palm and soyoils is now economically feasible even without taxexemptions or other government subsidies."

"This is a new factor and the additional demand from the crude mineral oilindustry seeking replacement will sharply raise world demand and lead to arapid reduction of available inventories of vegetable oils stocks."

Regions such as the European Union where government support has alreadycreated interest in biofuels will feel the greatest initial impact.