Page 12 - LatAmOil Week 23 2022
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                                                    Biodiesel content currently stands at about 10% in Brazil (Image: DTN)

       Source: Brazil can sustain 2% hike



       in biodiesel level of trucking fuel






                         THE Brazilian Oilseed Processors Association   faces a higher risk of seeing diesel imports from
                         (ABIOVE), a group set up by 13 companies   the US disrupted because of the Atlantic hurri-
                         that account for more than half of Brazil’s total   cane season. This would relieve some concerns
                         soybean processing volume, says the country’s   about supplies at a time when global oil and fuel
                         inventories of vegetable oil are big enough to   markets are volatile.
                         raise the amount of biodiesel blended into the   However, it would also exert some upward
                         diesel fuel used by truckers to 12%, according to   pressure on domestic diesel prices. Biodiesel
                         a report from Bloomberg.             is more costly than petroleum-based diesel, so
                           A source with knowledge of the matter told   raising content levels would make diesel blends
                         the news agency earlier this week that ABIOVE’s   more expensive at a time when prices are already
                         estimates show that Brazilian producers can   running high because world crude oil markets
                         deliver enough oil from their inventories and   have been so bullish since the Russian invasion
                         exportable surpluses to raise biodiesel content   of Ukraine in late February.
                         from the current level of 10% to 12%. He noted,   In turn, higher diesel prices might create
                         though, that soybean producers might have dif-  more turmoil on Brazil’s political scene. Fuel
                         ficulty supplying the amounts needed to raise   prices are already a hot-button issue in the South
                         the figure to higher levels.         American country, and President Jair Bolsonaro
                           Bloomberg’s source was referring to reports   is hoping to avoid being blamed by voters for
                         that Brazil’s government was considering pro-  economic hardship as he seeks another term in
                         posals to raise biodiesel content in trucking   office. (Brazil is slated to hold its next presiden-
                         diesel to 15% if diesel inventory levels remain   tial elections in October of this year.)
                         relatively low in the second half of the year.   As  of  press  time,  the  statements  from
                         The news agency said it had learned of the pro-  Bloomberg’s sources could not be con-
                         posal from people with direct knowledge of the   firmed. Brazil’s Ministry of Mines and Energy
                         subject who spoke on condition of anonymity   responded to the news agency’s request for com-
                         because the discussions had not been made   ment by reporting that no decision had been
                         public. It quoted one of the anonymous sources   made with respect to altering biodiesel content
                         as saying that the higher biodiesel content   levels, and the National Agency of Petroleum,
                         level would only remain in place for a limited   Natural Gas and Biofuels (ANP) did not answer
                         period if this plan were approved, but it did not   questions directly. Instead, it said in a statement
                         elaborate.                           sent to Bloomberg that it was keeping track of
                           Raising biodiesel content would have posi-  diesel market conditions and would propose the
                         tive consequences, in that it would help bolster   measures necessary to safeguard supplies. It did
                         inventory levels at a time of year when Brazil   not say what the measures might encompass. ™



       P12                                      www. NEWSBASE .com                           Week 23   09•June•2022
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