26/03/2008 (Commodity Online), Singapore - What would have been the crude oil price now with out the limited production of biodiesel. It would have reached $150-200 per barrel.

Experts attending the two-day Plantation Investment Asia 2008 Conference here said that many richer countries may subsidise biofuel to keep crude oil prices in check. The present production of 4-5 million barrels of biofuel has helped to keep world crude oil prices at current levels.

Biodiesel industry is in for tough times following high prices of edible oils, the feedstock of biodiesel, which has made its production unviable in US and Europe. There is high overcapacity in many plants in these two regions.

Chris de Lavigne, Frost and Sullivan, Singapore and David Jackson of LMC International Ltd said biodiesel production was linked to political will. If politicians don’t encourage biodiesel production, the industry will not take off.

In Argentina, subsidies and state support to biodiesel made it viable for biodiesel producers to survive and profit. Many small and medium firms producing biodiesel may go out of business and a shakeout in the industry is likely at the global level.

Diversion of food crops for fuel purposes is being viewed with alarm in poorer countries because people there spend 70 percent of their income on food and food prices have risen 40 percent in recent years.

Experts agreed the solution to the seemingly endless food versus fuel debate was to encourage production of biofuels from plant waste and other non-edible biomass.

India is trying to use bagasse, a waste product of sugar production, to produce energy. Coconut husks can also be used to produce energy. Such products don’t cut into food supply