Biodiesel on the Rise and Growing Soybean Consumption in Brazil
- Vanderlei Cadore
- Aug 22
- 2 min read
How the new B15 blend demand is reshaping Brazil’s soybean market.
As previously, we of RGA's, noted in our June USDA report, recent projections indicate significant changes in the dynamics of Brazil’s biofuel and soybean derivatives market. With the mandatory biodiesel blend increasing to 'B15' starting in August 2025, domestic soybean oil consumption is surging, driving up prices and reshaping Brazil’s competitiveness in global trade.
1. Consumption and Export Matrix – Overview
The chart below shows the absolute volumes of Brazil’s main soybean flows and derivatives for 2025:
Total soybean processing: 58.1 million tons.
Total soybean oil production: 11.65 million tons.
Soybean oil for biodiesel: 7.9 million tons.
Refined soybean oil consumption: ~2.3 million tons.
Degummed oil exports: 1.35 million tons.
Beef tallow exports: 290 thousand tons.
The horizontal chart above shows that over 85% of Brazil’s soybean oil production is absorbed domestically, with biodiesel leading the demand.
2. Growth and Pressures: What's Accelerating
TBiodiesel demand is expected to grow 8.9% in 2025, while soybean oil consumption for biodiesel rises 10.3%. Refined oil, used in the food industry, grows more modestly—around 3.5% estimated. Meanwhile, degummed oil exports fall 3.6%, signaling a shift toward domestic prioritization.
📌Highlight: Beef tallow exports—an alternative to soybean oil — jump 84%, reaching 290 thousand tons.
3. USDA Lagging Behind: Static Stocks, Shifting Reality
Despite strong revisions in domestic projections, the USDA kept Brazil’s final soybean stocks unchanged. This divergence between local and international data may lead to distortions in global pricing, affecting risk assessments and decision-making by traders and exporters. Brazil is experiencing an accelerated consumption reality that external models have yet to capture — but it has certainly already impacted local premiums.
4. Competitiveness at Risk: Dislocated Premiums and Parity
With domestic demand heating up, Brazil loses ground in international markets. This creates a disconnect between export premiums and internal parity, complicating negotiations and squeezing margins. While futures contracts suggest lower premiums, local deals reflect strong demand and limited supply.
5. Refined Oil vs. Biodiesel: The Silent Dispute
Refined soybean oil, vital to the food sector, competes directly with biodiesel as a feedstock. With over 85% of biodiesel inputs coming from soybean oil, prices are trending upward, and supply shortages may emerge in the second half of the year.
6. Sector Strategy: Management and Agility
In this scenario, producers, crushers, and exporters must strengthen strategic stock and contract management. Volatility between physical and futures markets will demand sharp local insights—especially as domestic consumption may exceed expectations and disrupt traditional export logic.
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