Brazil's soybean oil exports may surpass projections made at the beginning of 2026, driven higher by rising international demand, a trend likely to bolster prices and inflate biodiesel production costs.
Soybean oil shipments could total 2mn metric tonnes (t) in 2026, according to grain processing companies. That's above the 1.6mn t projection from Brazil's association of vegetable oil industries Abiove at the beginning of the year. Soybean oil dispatches in the first half of the year totaled 1mn t, according to data from trade ministry Mdic.
Even with the prospect of higher than expected exports, the supply of soybean oil in Brazil's domestic market is expected to remain sufficient to meet requirements of its biodiesel and food sectors. But increased competition for the product is likely to reduce its availability and drive up prices.
Soybean oil's profitability is fueling interest in exports. For vertically integrated companies — those that operate across different stages of the supply chain, from feedstock production to fuel manufacturing — it has been more advantageous to sell the oil on the international market than to use it for biodiesel production.
Argus indicators highlight the price disparity. Last week, soybean oil traded, on average, at R5,958 ($1,170)/t at the port of Paranagua, while the average price of biodiesel contracts in the Parana–Santa Catarina region stood at R5,628/t. The same trend took place in Mato Grosso state, where soybean oil averaged R5,725/t, compared with biodiesel contracts of R5,405/t in the state's north and R5,551/t in the south.
Soybean crushers are also struggling to negotiate soybean oil prices with biodiesel producers that are not vertically integrated or lack the capacity to fully meet their demand for the input. According to the sector, these plants are pushing for lower prices in their counter offers to purchase soybean oil, given the narrower margins on their bi-monthly biofuel supply contracts.
Despite biodiesel plants' resistance to higher soybean oil prices, the sector remains the largest market for crushers. In 2025, approximately 6.7mn t — around 56pc of national soybean oil production — were used for biodiesel production, according to Argus estimates. Exports, meanwhile, totaled 1.3mn t during the same period, accounting for nearly 11pc of production, according to data from Abiove.
International demand
The increased international demand for Brazilian soybean oil comes amid a rise in the mandatory biodiesel blending in diesel in Indonesia and Malaysia, putting Brazil on the radar of vegetable oil buyers.
In Indonesia, the biofuel blend in fossil fuel has increased to 50pc from 40pc, a measure likely to boost domestic palm oil consumption and reduce the product's supply on the international market. The increase in the blending mandate comes as Indonesian palm oil production is expected to begin a downward trend. Among the main challenges are aging trees, an insufficient replanting rate and declining yields.
Malaysia, another major palm oil producer, is also considering raising the mandatory biodiesel blend in diesel to 50pc. The country is working toward the goal of gradually increasing the share of biofuel to 30pc by 2030 in land transportation. The mandatory blend now sits at 10pc nationwide, but some regions have already adopted a 20pc blend.
