South American biodiesel blending policies shift soybean oil trade

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What happens when a country mandates more biodiesel in every liter of diesel sold?

In Brazil, the answer is already showing up in two places: soybean oil prices and exports.

Most Brazilian biodiesel is made from soybean oil, and, as blend requirement rises, domestic demand is expected to keep tightening the balance, pushing prices higher and further cutting exports.

Since August 2025, all diesel sold in Brazil must include a 15% biodiesel blend, with the law setting an increase to 16% by March 2026.

That’s why Brazilian domestic soybean oil has been priced at a premium to exports, as local demand tracked rising policy mandates.

Brazil's soybean oil market enters 2026 on the back of strong crushing activity. Monthly levels have consistently run above prior seasons, and S&P Global Energy CERA analysts expect another increase in 2026.

These numbers have been driven by two key factors: stronger Brazilian demand from the biodiesel sector and Brazil’s growing role as China’s primary soybean supplier.

But with less Brazilian soybean oil available to ship, foreign buyers may need to look elsewhere, or will need to pay up.