Abiove anticipates a sales increase of 1 million tons within the country for the year 2024. Despite the expected surge in domestic demand for biodiesel, soybean oil production is projected to remain relatively steady this year. The Brazilian Association of the Vegetable Oil Industry (Abiove) estimates the production volume to reach 11 million tons, a modest increase of 200,000 tons compared to 2023. It is noteworthy that soybean oil serves as the primary raw material for biodiesel production in Brazil.
As the proportion of biodiesel blended into fossil diesel at gas stations is set to rise from 12% to 14% in March, domestic consumption of soybean oil is forecasted to grow from 8.6 million to 9.6 million tons. However, considering the anticipated reduction in soybean harvest due to climate challenges linked to El Niño, and the absence of substantial raw materials for increased processing (expected to rise from 53.7 million to 54.5 million tons), exports of soybean oil are poised to decline.
Abiove projects a decrease in shipments from 2.337 million tons in 2023 to 1.45 million tons presently. Stock levels are anticipated to decrease, stabilizing just above 400 thousand tons, with a slight increase in imports expected, rising from 21 thousand to 50 thousand tons. Within this context, alternative sources for biodiesel production, such as beef tallow, may witness increased utilization.
Despite falling international soybean oil prices, domestic market sales are expected to be lucrative for industries. Nevertheless, Abiove predicts a decline in revenue from shipments, dropping from US$ 2.517 billion in the previous year to US$ 1.378 billion in 2024. This calculation factors in an almost 12% reduction in the average price of these sales, down to US$ 950 per ton.
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