Brazil’s biodiesel mandate will increase to 14% (B14) on March 1, and 15% (B15) in 2025. That’s already having an impact on Brazil’s domestic soyoil market. Since the end of 2023 when this increase was announced, the domestic market has been consistently outbidding the export market for soyoil. AgriCensus reports a more aggressive ramp-up could virtually take the country out of the export market in the short run.
“The domestic market is trading 2.50 cents per lb. higher than the export market,” Eduardo Vanin from Agrinvest told AgriCensus, adding that he believes Brazil’s soyoil export program will be limited due to this price difference.
Brazil’s congress is expected to vote on a law before the end of the month that intends to increase the biodiesel mandate to 20% (B20) or even 25% (B25).
“With the current installed capacity it is already possible to produce B20 [and] with the expansion projects that are already in place, total capacity will reach 16.25 billion liters, enough to meet approximately a 25% mandate,” industry associations and a parliamentary caucus said in a note on Wednesday.
Prospects of a significant backdrop in Brazil’s soyoil exports in 2024 are likely to create opportunities for rival exporters, with Argentina likely to the be biggest beneficiary.
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