Brazilian biodiesel plants completely stopped operations after a nine-day truckers' strike made it impossible for producers to ship the biofuel off-site and storage tanks reached capacity, industry association Ubrabio said.
Ubrabio requested that oil regulator ANP relax a ban on direct biodiesel sales by producers to end-consumers, and to temporarily allow some vehicles to use blends of up to 30pc.
Currently, ANP regulations forbid biodiesel producers from selling directly to distributors or retailers, requiring them instead to sell biofuel in regularly scheduled government auctions.
Last week, Ubrabio proposed that the ANP immediately raise the mandatory biodiesel blend to 15pc in Brazil's center-west region, where the biofuel is cheaper than regular diesel because of its proximity to abundant soybean and beef production, the two principal feedstocks for biodiesel.
So far, the ANP has rebuffed the industry proposals, and on the contrary has authorized the fuels industry to sell diesel with reduced rates of biodiesel, below the current B10 rate.
Last week, Brazil's vegetable oils industry Abiove said grain crushers had also been hurt by the strike with plants unable to receive or send out grains and products.
The strike is finally winding down after the government agreed to a 60-day diesel price subsidy, but the impact is still widespread.
The fall in biodiesel production comes as the ANP is preparing to hold an auction this week to supply the local market in July and August. The ANP set the ceiling price at R3.179/liter ($3.217/USG) for producers with the social seal, up from 3.058/l in the April auction, and to R3.143/l for mills without the seal, up from R3.02/l.
The recent rise in local soybean prices amid growing international demand for the product and the weakening of the Brazilian real contributed to the price increase, despite a record crop.
The ANP qualified 38 producers to participate in the auction, which is the third to supply the market under the new 10pc blend mandate. On 1 March, the government raised the blend from 8pc.
