Brazilian soybeans to be in high demand as biofuels get boost

Brazil is forecast to crush a record 43 million mt of soybeans in 2018 as the mandatory biodiesel blend heads for B10 in March and the RenovaBio biofuels stimulus bill awaits President Michel Temer’s signature to become law.

Brazil currently mandates a 9% blend of biodiesel into all commercial diesel, and 70% of that is made from soybean oil.

The Vegetable Oils Industry Association (Abiove) estimates that for every percentage point increase in the biodiesel blend, crushers like Bunge, ADM, Cargill and Louis Dreyfus will need to turn an additional 3.5 million mt of soybeans into 700,000 mt of soyoil and 2.8mn mt of meal.

Meanwhile, Abiove expect China to import more than 53 million mt of Brazilian soybeans from January through December next year.

The Senate passed the new biofuels program known as RenovaBio on Tuesday and the bill now goes to President Temer’s desk and must be signed within 15 days of passing the Senate or be vetoed.

The program, which will install a carbon-credit certificate system, is similar to the US RIN system. Biofuel producers will get the so-called CBios certificates and be able to sell them to distributors or on the B3 exchange. Fuel distributors will have to show they are reducing Brazil carbon emissions.

The program is the keystone to Brazil meeting its COP21 Paris climate accord promise to reduce greenhouse gas emissions to 43% less than 2005 levels by 2030.