Focus: The Biofuel Commodity Basket was structured and weighted by analysing* the largest bio fuel producing countries and their corresponding commodity consumption for the purpose. Bio ethanol production was capped at 70% in order to attain a meaningful representation of bio diesel; which represents the remaining 30%. Although bio diesel is not widely produced currently, the underlying commodities help achieve diversification. The basket’s actual underlyings are 8 certificates on futures contracts - sugar (33%), corn (28%), soybean oil (15%), wheat (6%), palm oil (6%), canola (5%), rapseed (4%) and soybean meal (3%).
*The data was drawn from the Renewable Fuels Association Industry Outlook 2005.
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