Itaú BBA projects significant growth in biodiesel production in Brazil in the coming years. Estimates indicate that production, which was 7.7 billion liters in 2023, should reach 11.2 billion liters in 2026. This represents an annual growth of 14%.
Furthermore, with the increase in biodiesel production, the demand for soybean oil as a raw material is expected to follow suit. In 2023, 4.6 million tons of soybean oil were used to produce biodiesel. In 2026, this amount is expected to rise to 7.2 million tons.
However, if the crushing capacity of soy If the production capacity in Brazil is not expanded to keep up with the growing domestic demand, soybean oil exports could suffer a drastic reduction in the coming years. In 2023, Brazil exported 2.3 million tons of soybean oil, consolidating its position as one of the world's largest exporters of this product. However, without a significant increase in processing capacity, the country could face a deficit scenario. It could become a net importer of soybean oil by 2026.
This favorable scenario should increase profit margins in the soybean crushing sector, encouraging new investments. The prospect of increased domestic demand, combined with a potential reduction in exports, creates a favorable environment for expanding the country's soybean crushing capacity.
Growth in biodiesel production in Brazil through 2026 represents a significant opportunity for the soybean oil sector. The need to meet domestic demand could transform the country from a net exporter to a net importer of soybean oil, while increasing profit margins and driving new investment in the sector.
Source: Leonardo Gottems | agrolink
