USDA Projects Substantial Growth in Biofuel Production from Soybean Oil

Mumbai, May 11 (Commoditiescontrol): According to the latest World Agricultural Supply and Demand Estimates Report by the United States Department of Agriculture (USDA), there will be a notable rise in the utilization of soybean oil for biofuel production in the fiscal years 2024-25. The USDA anticipates that consumption of soybean oil in biofuels will escalate by 1 billion pounds, reaching a total of 14 billion pounds.

This year's forecast sees the U.S. soybean crush expected to hit 2.43 billion bushels, marking an increase of 125 million bushels from the previous year. This surge is attributed primarily to the escalating demand for soybean oil as a critical biofuel feedstock, against the backdrop of a dynamic energy sector adapting to shifting regulatory and market conditions.

The projection also addresses recent market dynamics, including speculative impacts on the U.S. soybean oil market due to potential tariffs on imported used cooking oil from China. This has led to an increased reliance on domestic production, which is pushing American agricultural processors to expand capacities and enhance efficiencies.

On the international front, the USDA notes a robust performance in U.S. soybean oil exports, particularly to European biodiesel manufacturers. Despite the imposition of tariffs by nations like Germany and heightened competition from Argentina and Spain, U.S. biodiesel continues to carve out a significant share in the global marketplace.

The composition of raw materials for U.S. biofuel production has also shifted, with soybean oil's contribution declining to 31% as of February 2023. Nonetheless, processing activities within the country are on an upward trajectory, although overall oil utilization has tapered off.

Globally, soybean production is forecasted to expand by nearly 3 million tons (5 percent) this year, with significant contributions expected from China and the United States, where exports are notably constrained. Enhanced export activities from the European Union and Argentina are anticipated to meet the increasing import demands in burgeoning markets like India, North Africa, and the Middle East.

With global consumption poised to outstrip production, the USDA anticipates a reduction in soybean ending stocks from the 2023/24 levels, underscoring a tightening global supply amidst robust demand.

(By Commoditiescontrol Bureau; +91-9820130172)