Argentina exported 92,755 mt of biodiesel in February, a 106% jump from the same period in a year ago, according to Argentinian Biofuels Association, or CARBIO, data that Platts received Thursday.
February fixture data indicated as much as 60,500 mt was sent towards Europe by two major oil trading houses, which was reported to eventually make its way into the high-sulfur gasoil pool for discretionary blending purposes.
Discretionary blending takes place when fuel suppliers try to boost margins by increasing the amount of biodiesel or other economically viable components used in their gasoil and diesel.
The blending was unlikely to take place into material destined for the EU, due to anti-dumping duties on Argentinian biodiesel.
"This stuff is not getting customs cleared in Europe, not a single ton. It goes to Europe because the gasoil flow is coming from Rotterdam or the Mediterranean to Africa," said one European-based biodiesel trader in February, speaking on condition of anonymity.
One of the vessels in question, the Maersk Edward, next stopped at the Canary Islands and Ventspils, Latvia, according to Platts shipping software cFlow.
The other, the Torm Vita, visited Huelva in Spain, before arriving in Benghazi, Libya, where it was reported that the charterer had a short in gasoil.
In March, 41,600 mt was reported fixed between Argentina and Europe, with an additional 11,450 mt sent to unconfirmed destinations. Another 30,000 mt has been fixed into Spain already in April, according to a shipping report received Thursday.
The leap in exports came alongside local consumption of just 36,284 mt in the month, the lowest monthly value since March 2011.
After losing its main export market following an EU decision last year to implement anti-dumping duties, Argentina sought to boost domestic demand by increasing the mandate to 10% February 1.
But the biodiesel incorporation rate into diesel in Argentina was only half of the mandated level at 4.24% on a volume basis. This sharp drop also is a result of the low domestic biodiesel prices the government settled in February, which forced many small- and medium-sized producers to stop production as prices were below fixed costs.
Moreover, those that continued to produce have more incentive to build up stocks instead of selling at those price levels. Production in February, at 132,588 mt, declined 5.6% from the month before, but was 16.6% above the same month a year ago.
