StoneX Forecasts Record Brazil Diesel Demand, Bolstering Soybean Processing Sector

Brazil's total consumption of Diesel B, the fuel mixture used in transport and agriculture, is projected to reach a record 71.4 million cubic meters (m³) in 2027, according to a new forecast from commodities consultancy StoneX. This sustained domestic demand, propelled by a strong agricultural sector and a government-mandated blend increase, is set to provide a crucial counter-cyclical floor for Brazil's soybean processing industry. Biodiesel sales, which are an additive to Diesel B, are forecast to hit 11.23 million m³ in 2027, a figure contingent on the National Energy Policy Council (CNPE) approving an increase in the mandatory blend ratio to B16 (16% biodiesel content) next year.

The core mechanism linking fuel demand to agriculture is Brazil’s mandatory biodiesel blend policy, which requires diesel sold at the pump to contain a minimum percentage of the biofuel, with the current rate set at 15% (B15). Since soybean oil accounts for the vast majority of the country's biodiesel feedstock, the policy provides a guaranteed domestic market for Brazilian soy, a major crop for the world's largest exporter of the oilseed. A scenario where the blend moves to B16, as mandated by the "Fuel of the Future" law, would dramatically increase domestic crush demand, boosting the use of soy oil for biodiesel by an estimated 6.1% annually to 8.7 million tonnes. This political support acts as a strategic buffer for the domestic soy processing sector.

The record Diesel B demand is doubly fueled by the strength of the agricultural economy. Growth in the transport-heavy Center-West region, a major producer of grain, reflects expectations for continued strong harvests, with StoneX projecting a record soybean crop of 183.1 million tonnes for the 2026/27 season. However, the implementation of the higher mandatory blending rate remains a point of uncertainty for the Brazil soy complex. The increase to B16, which was scheduled for earlier this year, is subject to the completion of technical feasibility tests and final regulatory approval by the CNPE, which has delayed blend increases in the past due to concerns over inflation and technical compatibility.

This forecast from StoneX Brazil underscores a key structural advantage for the country's soy processing sector. While global commodity prices, such as soybeans trading at 1,215.25 cents per bushel (-0.12%), remain volatile, the domestic requirement for soybean oil as a biofuel feedstock secures a substantial and growing captive market for local processors. For the farmer and the industry, the government’s commitment to expanding biodiesel demand is one of the most reliable drivers of new crush capacity and value-added activity in the country.

What it touches The projection directly affects the outlook for the entire Brazilian soybean complex. Higher domestic crush demand for soy oil to produce biodiesel means more supply of soy meal, the high-protein byproduct used in animal feed, potentially affecting prices for both commodities and supporting the margins of crushers. The strength of the Diesel B market, driven by grain and logistical activity, provides indirect support to the country's main trade surplus earner: agricultural exports.