According to the 2022 soybean production forecast report first released by the Brazilian vegetable oil industry association (ABIOVE), the Brazilian soybean production in 2022 is expected to reach a record 144.1 million tons, higher than 138 million tons in 2021. ABIOVE said that due to the good selling price of soybean farms, farmers are prompted to increase the sowing area and increase the expected output. However, there are still many uncertain factors, such as the lack of predictability of biofuel policy, the lack of commercialization model and risks in the supply chain.
Biodiesel is the main demand driver of Brazil's oilseed processing industry, and soybean oil accounts for 70% of Brazil's biodiesel production raw materials. Although the government has set a compulsory blending ratio of 13% biodiesel, it has not really implemented it. Due to the high price of soybean oil and tight supply, the government has reduced the blending rate of biodiesel several times this year.
ABIOVE said that in order to increase soybean production, more soybeans need to be used to extract oil, and the biodiesel industry plays a key role in boosting the Brazilian soybean crushing industry. Biodiesel accounts for more than half of Brazil's consumption. In addition, the food industry needs to be developed, because soybean meal is the main feed raw material. According to an analysis report released by Rabobank this week, Brazil's soybean crushing volume will reach a record 47.5 million tons in 2022, an increase of 1 million tons over 2021. If the blending rate of biofuels is increased, the crushing capacity will be even higher.
Source: Master Boyi