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In W1 in the soybean oil landscape, Bangladesh's government approved the procurement of 11 million L of soybean oil for USD 15.52 million to stabilize domestic supplies amid rising demand. In New England, soybean oil is gaining traction as a key component of bioheat, a cleaner-burning alternative to traditional heating oil, creating a growing demand supported by environmental and maintenance benefits. Argentina's soybean oil prices remained stable at USD 0.97/kg, up 14.12% YoY but down 8.49% MoM due to record South American soybean production and policy uncertainty surrounding US biodiesel tax credits. In Brazil, prices increased driven by an expected record harvest and favorable export conditions, although domestic crushing demand limits export growth. Meanwhile, US prices dropped by 17.14% YoY, with an anticipated 83% surge in 2024/25 exports due to competitive pricing. Lastly, the Netherlands' soybean oil prices declined as EU imports dropped by 64% amid regulatory challenges, including deforestation-linked biofuel policies.

1. Weekly News

Bangladesh

Bangladesh Approves Procurement of 11 Million Liters of Soybean Oil

The Bangladeshi government approved the procurement of 11 million liters (L) of soybean oil by the state-run Trading Corporation of Bangladesh (TCB). The purchase totaled USD 15.52 million (BDT 1.89 billion), priced at USD 1.41/L (BDT) to address rising demand. This was done under the local Open Tender Method (OTM), a procurement process where bids are publicly invited, allowing all eligible suppliers to compete. This decision is part of broader efforts to secure essential commodities, including lentils and fertilizers, for the current fiscal year.

United States

Bio-Heat Adoption Boosts Demand for Soybean Oil in New England

The adoption of bio-heat, a cleaner-burning fuel derived from soybean oil, is gaining popularity in New England as residents seek alternatives to traditional heating oil. This shift has created a growing market for soybean oil, supported by its natural lubricity and reduced carbon emissions. According to the Wisconsin Soybean Marketing Board (WSMB), bioheat's advantages include lower maintenance requirements and compatibility with modified heating systems. The transition began with bio-diesel use, gradually evolving into a solid demand center for soybean oil in the heating sector.

2. Weekly Pricing

Weekly Soybean Oil Pricing Important Exporters (USD/kg)

* All pricing is wholesale, while Argentina is free on board (FOB)

Yearly Change in Soybean Oil Pricing Important Exporters (W1 2024 to W1 2025)

* All pricing is wholesale, while Argentina is FOB * Blank spaces on the graph signify data unavailability stemming from factors like missing data, supply unavailability, or seasonality

Argentina

In W1, Argentina's soybean oil prices remained stable at USD 0.97 per kilogram (kg), reflecting a 14.12% year-on-year (YoY) increase from USD 0.85/kg. Despite soybean complex exports reaching five-year highs, with 33 million metric tons (mmt) projected for the current campaign, prices have decreased 8.49% month-on-month (MoM) due to unfavorable international dynamics. Record production across South America, particularly Brazil's forecast of 171.5 mmt, has added to global supply pressures. In addition, the United States (US) government's proposed budget excludes extensions for biodiesel tax credits, contributing to a 10% drop in soybean oil prices since Nov-24. Seasonal factors have also played a role, with Nov-24 exports declining 14% compared to Oct-24. As a result, Argentine FOB prices for soybean oil have fallen below USD 1,000 per metric ton (mt), an 11% monthly decrease. If global supply continues to increase and biofuel policy uncertainties persist, soybean oil prices will likely face further declines.

Brazil

Brazil's soybean oil prices increased to USD 1.23/kg in W1, marking a 1.65% rise in both week-on-week (WoW) and YoY. This price uptick is primarily driven by an expected record soybean harvest in the 2024/25 season, supported by a 2.3% expansion in the planted area, particularly in the Maranhão, Tocantins, Piauí, and Bahia region (MATOPIBA), and parts of Santa Catarina. The United States Department of Agriculture (USDA) forecasts Brazil's total soybean production will reach 165 mmt, a 2.5% increase from the previous season, due to favorable weather conditions and advanced agricultural technologies such as drought-resistant seeds.

This production surge could lead to increased soybean oil exports, maintaining steady demand. However, despite higher production, soybean oil exports are expected to remain stable at 1.2 mmt for 2024/25, limited by competition from Brazil's domestic crushing industry. Additionally, with the Brazilian real expected to remain weak against the dollar, favorable currency conditions will likely continue to support Brazil's export competitiveness.

United States

US soybean oil prices declined to USD 0.87/kg in W1, reflecting a 1.14% WoW decrease and a 17.14% YoY drop. However, the USDA's Dec-24 World Agricultural Supply and Demand Estimates (WASDE) report forecasts a significant 83% increase in soybean oil exports for the 2024/25 season, reaching 1.1 billion pounds (lbs). Despite a 2% reduction in carryover stocks by Oct-25 and steady biofuel demand of 14 billion lbs, the increased export volumes suggest a tightening domestic supply.

Nevertheless, a forecasted production increase of up to 270 million lbs should help prevent sharp price hikes. The future trajectory of soybean oil prices will largely depend on sustained global demand, competition from other vegetable oils, and domestic production adjustments. The anticipated rise in exports could support prices, mitigating further declines and balancing the effects of potential production growth.

Netherlands

The Netherlands' soybean oil prices declined to USD 1.04/kg in W1, marking a 0.95% WoW decrease following two weeks of stability. The drop reflects broader market dynamics, including a 64% reduction in European Union (EU) soybean oil imports for the 2024/25 marketing year (MY), significantly weakening demand, leading to a 5.45% MoM price decrease. This trend is compounded by forecasts of record global soybean harvests in 2025 and growing concerns over biofuels linked to deforestation-driven feedstocks.

Policy measures such as the EU Renewable Energy Directive (RED) and the European Union Deforestation Regulation (EUDR) are expected to challenge soybean oil's role in biofuels further, potentially classifying it as a high Indirect Land Use Change (ILUC) risk. This could suppress demand further, potentially limiting price recovery in the near term. Future price trajectories will depend on evolving EU policies, global production trends, and shifts in biofuel market dynamics.

3. Actionable Recommendations

Expand Strategic Procurement to Address Demand Surges

Stakeholders in Bangladesh and other regions with rising demand should adopt flexible procurement strategies, such as forward contracts or expanded tendering processes, to secure stable soybean oil supplies at competitive prices. Leveraging partnerships with major exporters like Brazil and Argentina can help diversify supply sources, mitigating risks from localized disruptions. Simultaneously, exploring regional storage and distribution infrastructure improvements could reduce logistics costs and enhance supply chain reliability.

Promote Soybean Oil-Based Biofuels in Emerging Markets

To capitalize on the growing bioheat market in New England, stakeholders should encourage the adoption of soybean oil-based biofuels in emerging markets. Governments and industry players can collaborate to incentivize the transition to cleaner fuels by promoting subsidies, infrastructure upgrades, and public awareness campaigns. Highlighting soybean oil's environmental benefits and compatibility with existing systems can drive demand and open new markets, ensuring sustainable growth in the sector.

Strengthen Policies to Stabilize Export Competitiveness

To remain competitive amid global price fluctuations, soybean oil exporters like the US, Brazil, and Argentina should advocate for policies supporting biodiesel tax credits and sustainable farming practices. Introducing incentives for technological advancements, such as drought-resistant seeds, could boost production efficiency and stabilize prices. Maintaining favorable currency conditions and minimizing trade barriers would further enhance global competitiveness, supporting steady export volumes despite oversupply pressures.

Sources: Tridge, RFD TV, Jago News, Rising BD, Clarín, Agronews Castilla y León

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