Brazil's soybean derivative production is expected to surge in 2024 on record high crushing of 54 million mt, driven by increased demand for soybean oil in the biodiesel sector, according to the latest release from the Brazilian Association of Vegetable Oil Industries Oct. 17.
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Register NowThe raw bean crushing is estimated to surge from 53.5 million mt in 2023. Soybean oil production is estimated to touch 10.9 million mt in 2024 from 10.8 million mt in 2023. This is also expected to push soybean oil ending stocks in the country to 418,000 mt from 268,000 mt in 2023.
Soybean crushing and oil production surge comes amid improved biodiesel demand in Brazil. Soybean oil remains a major feedstock for biodiesel production in the country.
The oil derivative sale in domestic sector is pegged to increased to 9.2 million mt from 8.7 million mt, as per the report. "Grain processing should also be the largest ever recorded especially due to the increased demand for soybean oil for biodiesel.' said the report.
Export projection of soybean oil fell to 1.6 million mt in 2024 from 2.4 million mt this year, due to greater demand of oil for internal use.
Domestic demand for soybean oil is to rise in 2023-24, the federal government crop supply agency, Conab, said in an initial outlook earlier this month.
The total demand, including consumption in biodiesel, is seen rising to around 9.2 million mt from 8.4 million mt in 2022-23. This was around 6.7 million mt 2021- 22.
The outlook was based on an increase in the biodiesel mandate from B-12 to B-13 from April 2024 and an oil output of 11.1 million mt, up from 10.6 million mt. Moreover, oil exports are seen falling to 1.9 million mt from 2.6 million mt.
In September, Brazilian President Luiz Inacio Lula da Silva and cabinet members signed a bill for a biofuel program, called Combustivel do Futuro -- or Fuel of the Future -- which essentially seeks to promote sustainable, low-carbon transport fuel alternatives that will allow Brazil to meet its international greenhouse gas emission targets quickly.
Brazil is traditionally the world's largest producer and exporter of soybeans. With surging demand from China and supply constraints from drought-hit Argentina, Brazil is expected to be the leading supplier and exporter of raw beans, oil and meal derivatives in the 2023 marketing year.