Brazil biodiesel fees drop on diesel limits and currency shifts

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Brazil’s biodiesel negotiations for November and December reflected a shift in market dynamics. Margins faced pressure, and demand took a hit from tight diesel supply.

Logistics differentials, or “fees,” fell by over 30 reais per cubic meter nationwide as distributors leveraged ample inventories and restrictions on diesel access.  

The Sorriso-Nova Mutum region in Mato Grosso posted the largest decline, at 70 reais per cubic meter. Cuiabá-Rondonópolis and South of Goiás-Minas Gerais were also among the biggest declines.  

After expecting prices to rise, producers adjusted their offers lower. They’re also facing higher feedstock costs from currency shifts.

Brazil biodiesel term contract prices increased in the second quarter, but still fell short of producers' expectations. Now, the forecasts remain uncertain.

Ongoing volatility in the real against the dollar and uncertain diesel supply could continue to sway margins and liquidity in Brazil’s biodiesel sector.