Biofuel mandates redraw the soybean oil map in South America

South America’s soybean oil markets are being pulled in different directions heading into 2026. In Brazil, domestic policy—led by higher biodiesel blending mandates—is increasingly absorbing supply and reshaping trade flows. In Argentina, prices remain anchored to international demand, with South Asia continuing to set the tone. These contrasting dynamics emerge as policymakers across key vegetable oil-producing countries weigh more aggressive biofuel mandates. Indonesia’s proposed B50 program, alongside Brazil’s planned move to B16, could alter global supply and demand balances, with ripple effects across the SBO complex. Brazil’s SBO market enters 2026 on the back of strong crushing activity. Throughout the 2024-25 cycle, monthly levels constantly exceeded those of the previous harvest. S&P Global Energy CERA estimates that the season will conclude with a record-high crush, with another increase projected for the 2025-26 season. The record soybean production supporting this ...