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Brazil soy crushers' lobby pushes for rise in biodiesel blending

Tue 27th April, 2021 5:35pm
By Ana Mano
    SAO PAULO, April 27 (Reuters) - Brazilian oilseeds lobby
group Abiove is pushing the government to clearly signal whether
it plans to raise its biodiesel blending requirement after a
surprise move to temporarily cut it this month.
    The government is taking on "an enormous risk" by failing to
send a swift and strong message to crushers regarding the future
of blending, Abiove chief André Nassar told Reuters in an
interview. 
    "We think they need to signal to the market that it is going
to raise the mix," he said. "They need to do that everyday."
    On April 9, the government cut its biodiesel blending
requirement to 10% from 13% to keep fuel prices down at the
pump. About 70% of Brazil's biodiesel is produced from soy oil,
whose prices have risen due to strong demand and tight supply
for soybeans.  urn:newsml:reuters.com:*:nL1N2M22X4
    Depending on how the situation plays out, Abiove, which
represents companies like ADM  ADM.N , Bunge  BG.N , Cargill
 CARGIL.UL  and LDC  AKIRAU.UL , said Brazil could export more
soybean and soy oil this year.
    Abiove sees Brazil's soybean exports at 84.5 million tonnes
this season, and soyoil exports at 700,000 tonnes. Those
forecasts may be revised, Nassar said.      
    Nassar said the lower blending requirement, which applied to
last week's biodiesel auction only, caused the price of the fuel
to fall in relation to the price of soy oil. It may also hurt
crushers' margins at a time when Chicago soy prices are at
multi-year highs.
    Biodiesel auctions take place every two months, but the
authorities should signal now what the mandatory blending is
going to be so that crushers can prepare, Nassar said.
    "Now the government has reduced the biodiesel mandate," he
said. "Convincing it to go back is much more difficult than
dealing with market uncertainties."


 (Reporting by Ana Mano; Editing by Richard Chang)
 ((ana.mano@thomsonreuters.com; Tel: +55-11-5644-7704; Mob:
+55-119-4470-4529; Reuters Messaging:
ana.mano.thomsonreuters.com@reuters.net))
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