PALMOILMAGAZINE, RIO DE JANEIRO – The low production of soybean oil in Brazil has raised concerns among stakeholders, even as Argentina’s supply issues worsened. Soybean oil, a key ingredient in biodiesel production, became scarce due to logistical challenges on Argentina’s Paraná River. These difficulties further exacerbated the imbalance between demand and limited supply in Argentina.
The export price of soybean oil is a major factor in determining contract prices between biodiesel producers and distributors in Brazil. The reduced water flow in the Paraná River intensified the supply crisis, making it harder to meet demand.
According to Brazil’s National Petroleum Agency (ANP), soybean oil accounted for 72.5% of the raw materials used for biodiesel production during the first eight months of 2024. The rising price of soybean oil also impacted other inputs like beef tallow, which made up 6.5% of biodiesel feedstock during the same period.
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As reported by Palmoilmagazine.com, citing Reuters on Sunday (29/9/2024), many biodiesel producers in Brazil are now prioritizing transportation for contracts secured for September–October 2024 to address the material price surge. They also need to fulfill delayed contracts from the previous two months, limiting biodiesel availability in the spot market.
Besides, the leap of soyoil price in Paranagua now reduces the premium in the domestic markets compared to the exports. The local producers got more interesting to sell their products abroad.
For the close soyoil supplies, and the increasing price of other products, biodiesel trade in Brazil should face the big issue to fulfill the urgent domestic needs for the increasing biodiesel mixture mandate in the country. (P2)
