Brazilian soyabean oil exports surge
Soyabean oil exports from Brazil increased by 47% in the year up to April driven by a combination of a record harvest, high crushing levels and lower-than-expected domestic consumption, Bloomberg reported.
Although the South American country – the world’s leading producer of the oilseed – was processing record amounts of the crop, a delay in the country’s plans to boost local demand through biofuel mandates had led to a surplus of low cost soyabean oil supplies being shipped overseas, the 19 May report said.
While soyabean oil futures in Chicago had risen by almost 56% this year, prices at Brazilian ports had moved much slower, Bloomberg wrote.
According to Commodity3 data, the soyabean oil discount at the country’s main port Paranaguá was at its largest since 2023 at the time of the report.
Low prices had helped lift Brazilian soyabean oil exports by 47% this year up to April, to reach the second highest volume for the period in the past two decades.
Although soyabean oil is used in most biofuel production in Brazil, the country’s mandatory blending mandate had not been increased by March this year as expected and remained at 15%, with a rise to 16% pending technical tests, the report said.
As in neighbouring Argentina, which had also seen steep discounts on soyabean oil, soyabean supplies in Brazil were plentiful as the country was harvesting a record crop, Bloomberg wrote.
As a result, crushing levels were high, with processors focusing on vegetable oil exports to markets such as India, Bangladesh and North Africa.
“There is a lot of raw material supply,” João Paes de Almeida, founder of senior consulting firm J Pacta, was quoted as saying.
“Without a higher mandate for biodiesel, Brazil’s largest agricultural sector, which is soyabeans, will continue to set the price of its product below the Chicago benchmark.”
With soyabeans output projected to reach an “unprecedented milestone”, Brazil’s total grain production for 2025/26 is forecast to reach 358M tonnes, up 5.7M tonnes (1.6%) year-on-year, according to National Supply Company (Conab) projections reported by World Grain on 14 May.
In its eighth Grain Harvest Survey published on 14 May, Conab said the volume, if realised, would be a record harvest driven by good performances for soyabeans, corn and sorghum.
With 98.3% of soyabean area harvested, Conab forecast production at 180.1M tonnes, up 0.5% from its April outlook and 8.6M tonnes higher (5%) than the previous year.
Soyabean exports were projected to reach 116M tonnes, a 7.25% increase compared to the previous season.
There was also an increase in the first-crop corn planted area, Conab said.
With the harvest 71% complete at the time of the report, the forecasted production of 28.5M tonnes would exceed the previous marketing year by 3.5M tonnes, while the second harvest was projected to reach 108.5M tonnes, down 0.6% from the previous year.