In the coming years, historically high blending mandates and increasing domestic demand for soybean oil, essential for biodiesel production, could significantly impact Brazilian exports of the product, market sources told S&P Global Commodity Insights.
Currently, Brazil is the second-largest global exporter of soybean oil, with export projections for the 2024-25 marketing year at 1.4 million tons, a 22.2% decrease compared to the previous period, despite increased production, according to the U.S. Department of Agriculture (USDA). In 2024, soybean oil accounts for 72% of the raw materials used in biodiesel production, up from 69% in 2023, as reported by the Brazilian Association of Vegetable Oil Industries (Abiove). The current biodiesel blending mandate in Brazil stands at B14, the highest in the country’s history.
Brazilian soybean oil exports peaked with increased production and reduced blending mandates before experiencing a significant drop in the 2023-24 fiscal year. In April, soybean crushing volumes reached a monthly record of 4.8 million tons, aligning with analysts’ expectations from S&P Global Commodity Insights. The volume of soybeans crushed remained nearly unchanged from the previous year, resulting in soybean oil production of 965,000 tons for the month.
These figures highlight the challenges and opportunities faced by Brazil’s soybean oil sector, with the domestic market gaining importance due to high biodiesel blending mandates. Balancing growing internal demand with export expectations poses a challenge for producers and exporters, while record production reflects a robust response to global soybean oil demand.
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