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U.S. Biodiesel Market: Price Rally to Continue in 2022, Making Biofuel Uncompetitive

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U.S. Biodiesel Market: Price Rally to Continue in 2022, Making Biofuel Uncompetitive

IndexBox has just published a new report: ‘U.S. – Biodiesel – Market Analysis, Forecast, Size, Trends And Insights‘. Here is a summary of the report’s key findings.

Biodiesel prices in the U.S. soared by 59% y/y last year, making biofuel less competitive compared to fossil fuels. The average FOB price for American biodiesel B100 was $5.58 per gallon in November 2021, while the on-highway average price for conventional diesel was $3.74 per gallon.

Biodiesel prices skyrocketed in the U.S. in 2021, and their growth is to continue this year. According to USDA data, the average spot FOB export price for biodiesel B100 from the plants in Illinois, Indiana and Ohio reached $5.58 per gallon in November 2021, surging by 59% against 2020. The on-highway average price for conventional diesel soared by 41% y/y to $3.64 per gallon, remaining much lower than those of biodiesel.

The rising costs of vegetable raw materials and energy were the key reasons for the biodiesel price increase and will further propel the biofuel prices this year. According to World Bank’s forecast, the price for soybean oil, one of the significant raw inputs for biodiesel production, is set to grow by nearly 4% totalling $1,425 per tonne in 2022. The cost of fossil fuels is also projected to remain at the high level of 2021, which implies increased expenditures for energy in biodiesel manufacturing.

U.S. Biodiesel Exports by Country

Biodiesel exports from the U.S. surged to 476K tonnes in 2020, rising by 25% from the previous year’s figure. In value terms, supplies fell modestly to $381M (IndexBox estimates).

Canada (424K tonnes) was the leading destination for exports from the U.S., with an 89% share of total supplies. Moreover, exports to Canada exceeded the volume sent to the second major destination, Peru (19K tonnes), more than tenfold. The Netherlands (14K tonnes) held the third position in this ranking, with a 2.9% share.

In value terms, Canada ($351M) remains the key foreign market for biodiesel from the U.S., comprising 92% of total exports. The Netherlands ($9.9M) held the second position in the ranking, with a 2.6% share of total supplies. It was followed by Peru, with a 2.3% share.

Source: IndexBox Platform


Soybean Oil Prices to Gain 4% in 2022 Due to Boosting Demand for Biofuels

IndexBox has just published a new report: ‘World – Soybean Oil – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2022, soybean oil prices are forecast to rise by nearly 4% to $1,425 per tonne, driven by boosting demand for biofuels. In 2021, the average annual soybean oil price skyrocketed, rising 65% y-o-y to $1,385 per tonne. India remains the world’s largest soybean oil importer, while Argentina holds the position of the leading global supplier. 

Soybean Oil Price Forecast 2022

According to the World Bank’s October forecast, the average annual soybean oil price is set to grow by nearly 4% to $1,425 per tonne in 2022. Rising demand for biofuels, especially in Asia, will be the key driver of that increase.

In 2021, the average annual soybean oil price soared by 65% y-o-y, from $838 per tonne to $1,385 per tonne. The most rapid price growth was recorded in Q3, instigated by weather-related production shortfalls in South America, strong demand in China, and high freight rates.

Soybean Oil Imports 

In 2020, overseas soybean oil purchases increased by 7.5% to 13M tonnes, rising for the second year in a row after three years of decline. In value terms, soybean oil imports expanded notably to $10.3B (IndexBox estimates).

India was the major importing country with a purchase volume of around 3.7M tonnes, which resulted in 28% of global supplies. China (963K tonnes) held the second position in the ranking, followed by Algeria (670K tonnes) and Bangladesh (666K tonnes). All these countries together took near 17% share of total imports. Morocco (547K tonnes), Mauritania (537K tonnes), Peru (521K tonnes), South Korea (390K tonnes), Colombia (378K tonnes), Venezuela (373K tonnes), Egypt (243K tonnes), Poland (229K tonnes) and Nepal (215K tonnes) followed a long way behind the leaders.

In value terms, India ($3B) constitutes the largest market for imported soybean oil worldwide, comprising 29% of global imports. The second position in the ranking was occupied by China ($725M), with a 7% share of the total value. It was followed by Algeria, with a 4.6% share.

Top Largest Soybean Oil Exporters

In 2020, Argentina (5.3M tonnes) was the key exporter of soybean oil, constituting 42% of total exports. It was distantly followed by the U.S. (1,238K tonnes), Brazil (1,110K tonnes), Paraguay (631K tonnes), the Netherlands (615K tonnes) and Russia (611K tonnes), together creating a 33% share of global shipments. Spain (387K tonnes), Bolivia (377K tonnes), Ukraine (302K tonnes), Turkey (208K tonnes) and Germany (192K tonnes) held relatively small shares of the total volume.

In value terms, Argentina ($3.7B) remains the largest soybean oil supplier worldwide, comprising 39% of global exports. The second position in the ranking was occupied by the U.S. ($979M), with a 10% share of total supplies. It was followed by Brazil, with an 8% share.

Source: IndexBox Platform

soybean oil

The Global Soybean Oil Market Continues to Grow Despite Languishing Demand for Biodiesel During the Pandemic

IndexBox has just published a new report: ‘World – Soya-Bean Oil – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The soybean oil market indicates steady growth, despite the COVID-19 pandemic cut demand for biofuel. The competitive price of soybean oil, against the price for sunflower and palm oil, combined with the potential growth in demand for biofuels and increasingly robust environmental standards, signal tangible prospects for the further development of the soybean oil market

Key Trends and Insights

USDA estimates that global soybean oil production increased from 58M tonnes in 2019, to 61M tonnes in 2020. China and the USA constitute major producers of soybean oil, increasing output to 17.6M tonnes (+7.1% y-o-y) and 11.6M tonnes (+2.1% y-o-y), respectively.

Global soybean oil exports also remain robust, amounting to 12.6M tonnes in 2020, growing slightly against the previous year. Argentina, a key exporter of soybean oil, increased exports by 800K tonnes y-o-y in 2020, to 5.9M tonnes, despite the 600K tonnes slump in production against 2019. This increase in exports is largely a result of the decline in biodiesel production, necessitating the export of soybean oil that was originally designated for the production of biodiesel. A significant expansion of Argentia’s exports is not envisaged in 2021, due to the strong rate of the Argentine peso, high export duties, and the decline in demand for biodiesel and soybean meal, factors exacerbated by the pandemic.

In February 2021, average export prices (FOB, as monitored by International Grains Council) in the USA, Argentina, and Brazil increased against those in January 2021, reaching $1118/tonne (+$68/tonne), $1078/tonne (+$21/tonne), $1063/ton (+$10/tonne), respectively. From February 2020 to March 2021, soybean oil prices surged from 660-700 $US/tonne to 1000-1220 $US/tonne.

Soybean oil currently maintains a price advantage over its competitors. The average price (Decatur; Average Wholesale Tank Crude) for soybean oil in the USA, according to USDA estimates, stood at $748/ton in 2020-21, while the average price for sunflower oil reached $1,257/ton (Minneapolis FOB).

The global soybean oil market is forecast to develop in the medium term, following an increase in domestic demand in those countries where prices for competing for oil products, such as sunflower oil, remain higher. In the long-term, the potential market growth could be generated by the increased global use of sustainable soybean biodiesel, thereby echoing the Paris Agreement’s commitment to reduce greenhouse emissions.

China to Remain the Main Consumer while India to Lead in Import

The global soybean oil market expanded modestly to $51.2B in 2019, with an increase of 1.6% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

The countries with the highest volumes of soybean oil consumption in 2019 were China (18M tonnes), the U.S. (10M tonnes) and Brazil (8.7M tonnes), with a combined 63% share of global consumption. These countries were followed by India, Argentina, Bangladesh and Mexico, which together accounted for a further 15% (IndexBox estimates).

In value terms, China ($18.4B) led the market, alone. The second position in the ranking was occupied by the U.S. ($8.3B). It was followed by Brazil.

The countries with the highest levels of soybean oil per capita consumption in 2019 were Argentina (53 kg per person), Brazil (41 kg per person) and the U.S. (31 kg per person).

In 2019, global soybean oil imports stood at 12M tonnes, increasing at an average annual rate of +2.3% from 2012 to 2019. In value terms, soybean oil imports amounted to $8.9B (IndexBox estimates) in 2019.

India represented the key importing country with an import of around 3.1M tonnes, which resulted in 26% of total imports. Algeria (876K tonnes) ranks second in terms of total imports with a 7.3% share, followed by Bangladesh (6.3%), China (5%), Morocco (4.6%) and Peru (4.5%). The following importers – South Korea (347K tonnes), Colombia (336K tonnes), Venezuela (320K tonnes), Egypt (228K tonnes), Nepal (198K tonnes) and the UK (187K tonnes) – together made up 14% of total imports.

In value terms, India ($2.2B) constitutes the largest market for imported soya-bean oil worldwide, comprising 25% of global imports. The second position in the ranking was occupied by Algeria ($561M), with a 6.3% share of global imports. It was followed by Bangladesh, with a 5.5% share.

Source: IndexBox AI Platform


Biogas Market – Tremendous Potential of Landfill Gas will Fuel the Adoption of Renewable Energy

Biogas consumption has gained steady momentum due to the growing development of biogas plants in rural areas, as they are known to be a free source of renewable energy. Besides providing energy, biogas plants help in the improvement of public hygiene, curbing pollution, and recycling of waste materials. The biogas produced can be used to generate electricity and act as a substitute for gasoline and other fuels.

Rising environmental concerns regarding climate change and the steadily depleting natural resources has forced an extensive use of biogas products worldwide, propelling biogas market trends and the emergence of compatible technologies. Using this renewable energy source curbs the release of methane into the atmosphere and reduces the dependency on fossil fuels.

Mitigating the effects of emissions from transportation

After having used every potential biogas in the U.S., the total methane emissions reduced will be equal to the yearly emission of around 800,000 to 11 million passenger vehicles. Moreover, anaerobic digestion can be advantageous to both climate and the local economies. Developing about 13,500 biogas systems in the U.S. would lead to adding more than 335,000 temporary jobs in construction as well as 23,000 permanent jobs.

There has been a widespread insistence on the use of renewable energy sources leading to the massive penetration of biofuel in the transportation sector. For instance, conventional biofuels held nearly 4% of the total world transport fuel in the year 2016. Numerous biofuel projects have been introduced in countries like India, Thailand, and China. Various nations importing petroleum products are backed by improved policy support for biofuels that are produced domestically and has influenced the market for ethanol and biodiesel.

Widespread production of LFG gas in the United States

Landfills have been considered the third-largest source of methane emissions related to humans in the U.S. These landfills have anaerobic bacteria content similar to a digester which breaks down different organic materials to be able to produce biogas, and in this case, it is called landfill gas (LFG). The LFG gas can be collected and used as a form of energy instead of letting the gas out into the atmosphere.

An average home in the U.S. would use nearly 10,812 kilowatt-hours of electricity every year in 2015, while the LFG projects across the U.S. produce electricity of around 17 billion kilowatt-hours as well as deliver LFG of about 98 billion cubic feet into natural gas pipelines or even to the end-users directly every year.

Favorable government policies to foster the biogas industry

Government policies regarding the use of biogas in numerous developing countries have been the prime factor driving global biogas industry forecasts. The Ministry of New and Renewable Energy in India, for instance, will be implementing the National Biogas and Manure Management Program (NBMMP) across every state as well as the Union territories. India had witnessed an installation of nearly 4.75 million biogas plants as of March 31, 2014.

The government had set a target of setting up about 110,000 biogas plants in India which has been considered as the best option for households that have feed material, as it helps them to become self-dependent for cooking gas as well as obtain a highly organic-rich bio-manure.

Similar efforts will also assist households by protecting them from air pollution indoor and also saving the cost of constantly refilling LPG cylinders. The ministry is also known to provide subsidy for biogas plants that suitable are for families, which has resulted in the rise in general awareness regarding the biogas industry and its potential contribution towards environmental upliftment.