A new regulation introduced by Argentina reduces the compulsory blending rate of biodiesel, which may increase the export supply of soybean oil, which will put pressure on international soybean oil prices.
Argentina is the world’s number one soybean oil exporter and a major producer of biodiesel. Last week, the Argentine government allowed to reduce the amount of domestic diesel blended in domestic diesel. President Fernandez supports this approach and is expected to sign the bill before the end of this month to make it law.
Argentina’s new regulation aims to ensure the sustainable use of biodiesel. After the regulation was passed by the House of Commons, it was approved by the Senate on Friday. The minimum blending rate of biodiesel in diesel sold to the public is expected to be 5%, and may drop to 3%, compared to the previous mandatory blending rate of 10%.
Argentine soybean oil has a price advantage in the international market. The average price of soybean oil in Argentina last month was US$1191 per ton, while soybean oil in Brazil was US$1233 per ton and US soybean oil was US$1608 per ton.
The Argentine Biofuel Industry Chamber of Commerce stated that the decline in the blending rate of biodiesel means an increase in the export supply of soybean oil, which will put downward pressure on the price of soybean oil in Argentina. According to the 10% blending rate of 10%, Argentina consumes about 1 million tons of biodiesel each year, and according to the new blending rate, this consumption will be reduced by half.
Source: Master Boyi
Post time: Jul-27-2021