Brazil emerges as a key growth hub for soybean oil demand

Biodiesel production in Brazil has become one of the main drivers supporting demand for soybean oil and soybean prices. Currently, around 75% of the country’s biodiesel is produced from soybean oil, making the soy sector a direct beneficiary of this policy. Each additional percentage point in the biodiesel blending mandate requires roughly 400,000 tonnes of vegetable oil derived from soybeans.

According to the USDA, soybean oil production in Brazil could reach 12.44 million tonnes in the 2025/26 season, while industrial demand — including biodiesel — may rise to 6.9 million tonnes, up from 4.3 million tonnes in 2022/23. Although the timeline for increasing the blending mandate remains uncertain, experts expect a move toward B16 in the second half of the year or by the end of next year, with plans to reach B20 by 2030.

Political considerations are currently slowing the process, as the government remains cautious in an election year about decisions that could impact diesel prices and inflation, despite strong pressure from producers. However, rising oil prices could significantly accelerate these changes.

Under these conditions, demand for soybean oil in Brazil is expected to continue growing, positioning the country as one of the key demand centers for soy in the Southern Hemisphere.

Tags: soybean oil, Brazil, biofuel