The correct prices for these forward months are:
M5: 185 c$/bu
M8: 162 c$/bu
M9: 166 c$/bu

Fastmarkets’ pricing database has been updated to reflect this change.

This price is part of the Fastmarkets Ags Grains Prices package.

For more information or to provide feedback on this correction notice or if you would like to provide price information by becoming a data submitter to this assessment, please contact Tim Worledge by email at: pricing@fastmarkets.com. Please add the subject heading “FAO: Tim Worledge, re: Corn CIF Vietnam Premium.“

Please indicate if comments are confidential. Fastmarkets will consider all comments received and will make comments not marked as confidential available upon request.

To see all Fastmarkets pricing methodology and specification documents, go to https://www.fastmarkets.com/methodology.

The post Correction to Corn CIF Vietnam premium forward curves on November 14 appeared first on Fastmarkets.

The International Energy Agency (IEA) said earlier this year that India had attained an average blend rate of 10% by June 2022 and was phasing in E20 blends from April 2023.

While sugar will play a major role in producing ethanol, demand for corn is also expected to step up; one industry source told Fastmarkets they expect India’s corn use for ethanol demand to double to 12.5 million tonnes in 2025 from 6 million tonnes in 2024.

“Are we going to grow an extra 6 million tonnes of corn or are other industries going to suffer?” one trade source said of the forecast, with human food, fuel feedstock and animal feed demand all expected to compete for corn supplies.

The USDA forecasts India’s corn production to be stable year on year, landing at 37.5 million tonnes for both the 2023/24 and 2024/25 marketing years, making it the sixth-largest corn producer in the world.

But domestic consumption is already forecast to increase to 38.6 million tonnes, up by 850,000 tonnes from the previous year and over 1.1 million tonnes above production.

Nonetheless, imports are expected to decline to 500,000 tonnes, down by 350,000 tonnes, and stock levels are expected to decrease sharply, according to the USDA’s estimates, falling by 900,000 tonnes to 1.8 million tonnes and marking a five-year low.

“[The government is saying it] will increase ethanol blending targets, and certainly pressure will come on corn only,” a second trade source told Fastmarkets, saying that the effect has likely already been felt among importers.

India reported an active increase in corn imports through the 2024 calendar year; some states have campaigned to allow further imports, with domestic poultry producers – a significant domestic consumer – complaining about the relatively high price of animal feeds.

But allowing increased imports can come with political costs, as the country’s huge farming community is a significant electoral bloc and can suffer financial losses when increased imports lead to lower domestic prices.

Nonetheless, the country has already experienced a surge in imports through 2024, according to Fastmarkets data, with close to 290,000 tonnes of imports reported in January-August.

The bulk of that volume has come from Ukraine, according to customs data, with a small proportion also booked from regional suppliers such as South Africa and Myanmar, a trend that is likely to continue, sources said.

“Yes, there are already trades happening from Myanmar for November-December shipment,” the second source said, estimating that 250,000-500,000 tonnes will likely move from Myanmar to India through the last two months of the year.

Despite that, trade sources told Fastmarkets that increased imports would only be a last resort, with stocks likely to be drawn down and the country expected to harvest a relatively big corn crop.

Any imports would depend on the relationship between domestic and international corn prices, with imports only possible if they prove to be more competitive than buying corn from the local market, trade sources said.

“It means that import demand will also go up, but not right now, as we have a big crop harvest starting. So, imports should ideally happen in January-March or May-July,” a third local source said.

Food versus fuel

The onset of extreme weather has polarized the debate around climate change in recent months, catalyzing action in some regions but spawning backlashes in others amid higher costs of biofuels versus relatively cheap crude oil.

India, which earlier this year recorded extreme temperatures of over 50 degrees Celsius (122 degrees Fahrenheit) in the capital Delhi, has set out a roadmap to get to an E20 ethanol mix by 2030, although it looks to be on course to hit that 20% figure in 2025, according to the IEA.

Alongside that, the country has also mulled a 5% biodiesel blend target (B5), and, recently, professional services company Deloitte released a report suggesting that India could produce up to 10 million tonnes of sustainable aviation fuel (SAF) with the right incentives and support.

While the report factored in the use of 2.4 million tonnes of waste-based cooking oil in producing SAF, it also noted that 37 million tonnes of corn and 33 million tonnes of sugar would also form viable feedstocks to meet the target.

The influx of mandates, new incentives and technologies that are able to produce sophisticated, high-quality biofuels has galvanized the biofuels sector, despite potential rollbacks in some regions, but it has comprehensively reignited the food versus fuel debate.

For some countries, including India, the objective of ramping up more biofuel production is only partially environmental; there is also an energy security element that feeds into the dynamic.

The Indian government’s Roadmap for Ethanol Blending in India 2020-2025, released in 2021, set out the need for increased ethanol blending in India’s gasoline mix, and it began by highlighting that the country was a net petroleum importer of 185 million tonnes at a cost of $55 billion in the 2020/21 fiscal year.

View our biofuels and feedstocks prices

The post India’s corn trade braces as ethanol mandate hike fires competition fears appeared first on Fastmarkets.

This development bucks a trend during which those four countries – each of which is a significant supplier of feedstocks or fuels derived from palm products or used cooking oil (UCO) – have been taking a bigger share of the UK’s feedstock market in recent years.

But overall volumes have declined because decisions were made, perhaps for administrative reasons, to delay declarations of origins and types of fuels. This came amid increased scrutiny of some flows as well as concerns about a potential increase in fuels originating in China or the US.

Participating parties are not required to release this data until the compilation of the final report, at the end of the compliance period in September 2025, and analysis of the data suggests that hesitation in declaring volumes, feedstocks and origins is playing a part in clouding the data.

According to the report, the total supplied volume of renewable fuel has dropped by 13% to 1.71 billion liters in 2024 from 1.97 billion liters in the corresponding data release for 2023.

However, once delivered into the UK, the fuel has to be validated before a renewable transport fuel certificate (RTFC) can be issued, and those compliance rates have significantly declined year on year, to 39% in this first data cut for 2024, compared with 47% at the same stage of 2023.

Regarding individual countries, the volumes of fuel from China, Malaysia, Indonesia and the US have dropped sharply at this stage of the cycle. Only 97 million liters have been confirmed so far as renewable fuel supplied from one of the four countries, compared with 278 million liters in 2023.

An industry source declined to be quoted on the record but acknowledged that data submission delays could be a factor in this. And if key companies, especially those importing from the US, have been slower in submitting their data, this could account for the lower-than-expected numbers in this initial release.

Lack of clarity

Each of the main priority areas of UK carbon emissions policies has shown a decline in data clarity, with just 7 million liters of sustainable aviation fuel (SAF) declared in 2024, with around 6 million liters of that being drawn from China and Malaysia.

That compares with 13 million liters declared at the same stage of 2023, when China and Malaysia accounted for around 9 million liters. In all cases, the feedstock was identified as UCO.

For hydrotreated vegetable oil – a sophisticated type of biodiesel that closely mirrors the performance of fossil fuel-based diesel – the number of countries supplying fuel or feedstock increased in 2024, but overall volumes declared were sharply lower.

Around 25 million liters of HVO has been certified, versus 102 million liters at the same time in 2023, with China’s contribution reduced and the US portion absent.

That contrasts with market feedback, received throughout the year, that there has been a step-up in volumes of renewable diesel coming from the US, which has brought pressure on domestic production margins and prompted comment from UK-based industry groups.

Paul Thompson, of the Association for Renewable Energy and Clean Technology (REA), told Fastmarkets earlier that “cheap [US biodiesel] imports are affecting our members already.”

But US HVO is absent from the first data series – and much of the US contribution to the UK’s biofuel supply is again focused on ethanol.

Just 23,000 tonnes of US-origin UCO-based fuel has been supplied to the UK in the form of waste-based used cooking oil methyl ester (UCOME) biodiesel. It was not classified as the more sophisticated renewable diesel, for which there has been a significant increase in US production capacity in recent months.

Finally, the supply of palm-based products was slashed to 13 million liters, with 10 million liters coming from Indonesia and the balance from Malaysia, while 8 million liters were used to produce conventional biodiesel and only 5 million classed as HVO.

In all cases, the feedstock was palm oil mill effluent. This contrasted with the 2023 data, when 81 million liters of palm-based product had been declared and both palm oil and palm oil mill effluent were feedstocks.

In 2023, Malaysia supplied 18 million liters and Indonesia 63 million liters, with small volumes also supplied from Mexico.

Scrutiny on trade flows

On the primary data, the published update provided insight into how the key elements of the UK’s biofuel market have evolved so far in 2024, with 1.08 billion RTFCs issued by the end of July.

That figure was down from 1.5 billion such certificates issued during the same seven-month period in 2023.

There was also a reduction in volumes in the broader biofuel sector, with general biofuels – typically waste-based – falling to 421 million liters from 594 million liters, and crop-based biofuels dropping by almost 90 million liters to 240 million liters.

UCO, the largest single feedstock, showed a decline in supply to 158 million liters of renewable diesel from 375 million liters last year, with the landscape around the feedstock market undergoing a series of challenges.

In December 2023, the European Commission initiated an investigation in an attempt to regulate the entry of China-origin biodiesel into Europe, primarily in the form of UCOME derived from UCO.

Following this, the Commission recently confirmed that anti-dumping duties will be applied to Chinese biodiesel producers from Friday August 16.

Previous analysis undertaken by Fastmarkets has shown that the UK has reported a steady uptick in the use of palm oil-based feedstocks and an increased reliance on origins such as China, the US, Indonesia and Malaysia.

With the UK now outside the EU, it is no longer covered by EU anti-dumping regulations, nor bound by pre-existing limits on imports from powerhouse producers such as the US, whose ethanol exports have also drawn the attention of EU legislators in the past.

This means that the UK has benefited from access to a wider range of feedstocks and finished biofuels – but potentially at a cost to the country’s domestic producers. Scotland-based biodiesel producer Argent announced in May that it was closing its production unit at Motherwell.

Amid these declines in conventional fuels, there was a notable increase in development fuels, particularly those derived from end-of-life tires sourced from Indonesia, Poland, Slovakia and Sweden.

These tires were converted into 1.2 million liters of development diesel and 852,000 liters of development petrol. These figures were up from the 644,000 liters of development diesel and 460,000 liters of development petrol supplied during the same January to July period of 2023.

Renewable Transport Fuel Obligation

Under the Renewable Transport Fuel Obligation (RTFO), the UK mandates a specific percentage-based blend target for the general fuel mix for each year through to 2032. The overall mandate increases annually, while the contribution of crop-based feedstocks is reduced year on year.

Obligated parties in the UK market – those that supply more than 450,000 liters into the fuel mix – must meet the blend targets, but audit data is collected over a long period, and the full balance is not expected to be settled until September of the year following the initial data release.

Over the course of that timeframe, the UK government released five provisional reports detailing the full account of feedstocks used, fuels supplied, countries of origin and the number of RTFCs issued. A final report is usually released in November of the year following the end of the compliance period.

Consequently, final compliance with 2024 targets is not expected until late September 2025, with the final data view for the full year to be presented in November 2025.

For 2024, the UK has a mandate requiring 14.94% of the country’s entire road fuel supply to be drawn from a renewable source, with the use of crop-based feedstocks capped at 3.33%.

Alongside that, the mandate for the use of development fuels was set at 1.37%, meaning that 10.2% of the total UK fuel supply must come from waste-based feedstocks.

View our biofuels and feedstocks prices

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Proposals to add biofuel production units to existing BP refining sites were shelved back in June, while another three similar plans were placed under assessment while the oil major moved to simplify its biofuel portfolio.

That announcement had come as BP confirmed plans to buy out the other 50% stake in its Brazilian sugarcane-to-ethanol joint venture with Bunge – BP Bunge Bioenergia – with the second-quarter results justifying the decision.

“Our decision to take full ownership of BP Bunge Bioenergia while scaling back plans for new biofuels projects demonstrates our commitment to delivering as a simpler, more focused and higher value company,” chief executive officer Murray Auchincloss said in a statement.

The results highlight the ongoing robust nature of the fossil fuel-based energy sector, versus the challenges the biofuels space – and particularly the European biofuels sector – are facing.

Rival oil major Shell recently announced a delay in its plans to add new renewable fuel capacity to some of its existing refining sites, while US-based oil major Chevron has furloughed workers at its Germany-based biodiesel plant.

View our SAF prices

Pressure on European markets

That has come amid intense pressure on the European sector as a flood of Chinese waste-based UCOME biodiesel weighed on values in the region and slashed production margins for local producers.

The EU, after being urged to investigate by a slew of industry bodies, confirmed earlier this month that it would apply anti-dumping duties to the flows, in a move that was welcomed by the bloc’s producers.

However, challenges remain – with increasingly potent US-based biorefineries now online and producing, demand for key feedstocks has remained strong and prices have recovered, piling extra pressure on European producers.

The situation in the US – where sophisticated new renewable production capacity qualifies for tax breaks to incentivize production – is at odds with Europe, where demand is mandated through blend targets.

That means production margins are key for European producers, and with finished biodiesel prices relatively low, and feedstock prices supported, margins have not looked attractive for the bloc.

Strategic move into feedstocks

BP’s focus on Brazil-based sugarcane production likely represents a strategic move into the feedstock space, after rival Brazilian ethanol producer Raizen achieved certification for its bagasse-based ethanol production as a feedstock to SAF.

Alcohol-to-jet fuel processes mean that corn and sugarcane-produced ethanol are now being looked at with more interest as a potential to fuel huge investments in SAF production to meet ambitious blend targets.

Overall, BP reported $9.6 billion in earnings for the quarter, down by 1.3% from the previous quarter, with underlying replacement cost profits for the first half of the year landing at $5.5 billion.

That is down by 27% in the first half of 2023, according to BP.

View our biofuels and feedstocks prices

The post BP heralds scaling back of biofuel projects as Q2 profits hit $2.76 billion appeared first on Fastmarkets.

Thirty-nine companies would be subject to 36.4% provisional anti-dumping duty, according to documents seen by Fastmarkets, with another three named companies subject to penalties ranging between 12.8% and 36.4%.

Companies that cooperated with the EC’s investigation would face 23.7% duty.

The European Waste-based and Advanced Biofuels Association (EWABA) warmly welcomed the decision and hoped that it would “normalize” the market after a period of “extreme adversity” since late 2022.

“Today is a great day for the biodiesel industry. Our members’ margins have been negative for the most part of two years,” Angel Alberdi, secretary general of EWABA, said in a press release also published on Friday.

But the European Biodiesel Board (EBB) expressed “grave concern” that the decision – which it said would apply to hydrotreated vegetable oil (HVO) and the staple biodiesel blend FAME – would not also consider Chinese sustainable aviation fuel (SAF).

“In the [European] Union’s interests, EBB expects the European Commission to address unfair trade from Chinese SAF producers, which would otherwise seriously damage the industry and lead to a reliance on China in the future,” a press release from the EBB said.

“Our European businesses have been suffering for far too long under the pressure of unfairly priced Chinese imports, and we are very happy to see the European Commission take action,” EBB president Dickon Posnett said.

Finally, Brussels-based industry group Transport & Environment described the move as “a step in the right direction” but warned that tariffs alone would not prevent “mislabeled palm oil from entering the European market.”

Impact on biodiesel prices and margins

Precise volumes were very difficult to gather, but analysts at European investment bank UBS estimated that 1.8 million tonnes of Chinese biodiesel had arrived in Europe in 2023, weighing on physical biodiesel prices and affecting margins for European producers.

Fastmarkets’ pricing data showed that the physical premium to buy waste-based biodiesel, known as UCOME, peaked in mid-August 2022 at $1,300 per tonne over the ICE gasoil futures contract.

But by the beginning of October the same year, that had already dropped to $795 per tonne, and it bottomed out at just $345 per tonne in February 2024.

That reflected the oversupply of UCOME in the main Amsterdam-Rotterdam-Antwerp hub, with the sustained pressure on prices also weighing on prices for rapeseed-based biodiesel, RME, and the main FAME blend.

That in turn led to mounting complaints from producers and their industry bodies, with both the EBB and EWABA at the forefront of calls to initiate anti-dumping investigations.

While UCOME premiums have since recovered, physical prices were broadly stable when the news broke, trading at $590-620 per tonne in late-Friday business.

View our biofuels and feedstocks prices

The post The European Commission puts anti-dumping duty on Chinese biodiesel appeared first on Fastmarkets.

The statement builds on forecasts from the International Grain Council (IGC); it recently announced that total rapeseed production is expected to reach 87.2 million tonnes, down by 1 million tonnes from the previous forecast and a 2% drop compared with the previous year.

Much of the reduction in the forecast was attributed to a smaller Australian crop projection, which was cut by 700,000 tonnes to 5.4 million tonnes, representing close to 78% of the entire global reduction.

IGC has forecast demand at 88.7 million tonnes, down by 0.5%, leaving a global shortfall of 1.5 million tonnes and putting pressure on end-of-year stocks.

“At 5.6 million tonnes, the amount of rapeseed in storage would be as much as around 21% smaller than it was the previous year and 1 million tonnes smaller than forecast last month,” UFOP warned in the press release.

Demand for rapeseed oil in biodiesel fuel and future hydrotreated vegetable oil (HVO) production is supported by the discontinuation of the option of crediting palm oil-based biofuels toward greenhouse gas reduction obligations in Germany and other EU member states, including France and Sweden, the report said.

That teed up an opportunity for farmers to capitalize on expectations of higher prices for the oilseed, just when changing legislation would likely curb demand for rival soft oils.

Rapeseed is both a staple of cooking oil production and a mainstay of European biodiesel demand – its superior cold properties favor its use in the harsher European winter conditions, with Europe, Australia and Canada being among the biggest producers of the oilseed.

Despite Europe moving toward a future biofuel landscape that is less reliant upon both crop-based feedstocks in general and palm oil use specifically, mandates and targets in the decades ahead are likely to strain feedstock balances.

For sustainable aviation fuel (SAF) alone, Europe is tilting at achieving a 70% minimum SAF blend by 2050 – although the bloc will introduce a 2% minimum in 2025.

View our veg oil prices

The post Germany’s UFOP warns current rapeseed output ‘insufficient’ to meet demand appeared first on Fastmarkets.

A round of US trade sanctions unveiled earlier in the week had been expected to impose tariffs on both Chinese electric vehicles and UCO flows, but ultimately stopped short of including the waste oil.

That move came just months after the EU announced that it was investigating similar flows to the bloc.

US trade sources have come to refer to Chinese trade flows as BUCO – meaning ‘barely’ used cooking oil – amid allegations that the supposed waste-based flows have been cut with palm oil or other near-virgin vegetable oils.

SAF production investments in China

But a news article published in May highlighted that investors were channeling billions of dollars of investment into SAF production in China, in a move that could make the authenticity of Chinese UCO flows a moot point.

The article said that investors were expecting a potential blending mandate for as much as 5% being introduced by 2030, while China itself has already delivered some clear signs of its intent to move into the SAF sector.

The East Asian country’s aviation authority set up a working group which issued recommendation number 5517 to the first session of the 14th National People’s Congress, which ran March 5-13 last year.

In response to the recommendations to boost SAF production, Chinese authorities confirmed that the proposals would be added to the 14th Five-Year Plan, spanning the 2021-25 period – which already includes plans to build another 30 airports across China.

Alongside that, Junheng Biotech confirmed in a press release published on April 1 this year that its HEFA-SPK SAF fuel had been approved by China’s civil aviation authority for use in aircraft, making it the first private petrochemical company to attain approval for commercial use.

Hydroprocessed esters and fatty acids (HEFA) is one of the more established pathways toward producing SAF from vegetable oils, used cooking oils and animal fats.

How is SAF supply meeting demand and what incentives are in place to boost production and adoption? Access our data analysis on US SAF production patterns and credit pricing trends.

Chinese UCO exports

According to the latest data available from the Chinese customs authority, close to 140,000 tonnes of UCO left China in March this year, with the bulk of the volume, 65,189 tonnes, heading to the US.

That figure in itself was up by 72% compared with the corresponding period in 2023, with the US ramping-up production of renewable diesel oil at key facilities in California and across the US Gulf.

Another 53,454 tonnes headed to Singapore, where Finnish biofuel major Neste has a newly enhanced biorefinery, capable of producing as much as 1 million tonnes per year of SAF.

Overall, however, the total volume of UCO exports dropped by 11% from the previous year’s figure. While most sources spoken to by Fastmarkets said that it was unlikely that there would be enough scale to affect flows in the short term, with new facilities coming online, there could be substantial changes to trade flows and price dynamics.

“It will have no effect on regular palm, but a huge effect on waste and sludge,” one Malaysia-based trader told Fastmarkets, with the wider Asia region emerging as a key supplier of used cooking oil to the nascent European and US production of renewable diesel and SAF.

“I assume, when SAF is implemented fully, the price of sludge oil could be higher than crude palm oil [CPO] because there will be more demand than supply,” the source said. A second source agreed that an inversion in prices would be a side-effect of adopting feedstocks for SAF use.

The price of crude palm oil on a CIF Rotterdam basis was assessed at $980 per tonne, with UCO assessed on the same basis at $972.50 per tonne, according to Fastmarkets data. This was a much tighter range compared with the $180 per tonne premium that CPO commanded over UCO in early March.

Ambitious mandates to drive SAF development

Significant mandates and incentives across the EU and the US have already set a path for the adoption of SAF across the two economic powerhouses. Adding China to the mix would have profound implications for assumptions about waste feedstock supplies and availabilities.

The US launched a 35 billion gallon grand challenge to promote the development of SAF across the domestic market between now and 2050, while the EU committed to a hugely ambitious plan to build a 70% SAF blending mandate over the same timeframe.

Both these initiatives would amount to millions of tonnes of SAF being needed in the years ahead, so the addition of even a 5% mandate into China would add further pressure to that scenario.

View our biofuels and feedstocks prices

The post Beleaguered Chinese UCO exports could fade as China SAF mandate hopes rise appeared first on Fastmarkets.

Australia is one of the world’s biggest exporters of agricultural products – particularly wheat, barley and rapeseed – but is also a major producer of sugar and used cooking oil – all potential feedstocks for SAF production.

View our SAF prices

Structural change in agriculture demand for biofuels

But increasing pressure on the aviation sector to find ways to decarbonize has driven governments in the US, the EU, the UK and China to consider introducing incentives to encourage the wider use and adoption of SAF globally.

Some targets are so ambitious that they are likely to drive a broader change in global trade flows, with the US targeting 35 billion gallons of SAF production by 2050 – more than twice the existing ethanol mandate – and the EU calling for 70% of all jet fuel to be sustainable by 2050.

“This could ultimately lead to a structural change in demand for Australian agricultural products similar to that previously created by the growth of the automotive biofuels industry in Europe and the US,” the report’s author, Stefan Vogel of RaboResearch said.

While supplying grain and oilseed feedstocks directly into SAF production would be the most likely way for the agriculture sector to benefit from the increased use of SAF, the report says that much of the debate around SAF is starting to focus on sustainable farming credentials.

“The lower the carbon footprint these agricultural feedstocks have, the higher the price premium they are likely to be able to command,” Vogel said, with any incentives likely to hasten the drive to lower-carbon farming practices, with farmers bidding to lock in higher prices for the key feedstocks.

Globally, SAF production capacity is likely to have reached 17 million tonnes within two years, rising to 25 million tonnes by 2030, the report says.

“Three quarters of the announced global production capacity [is] expected to use a technology that requires fats such as vegetable oils, animal fat or used cooking oil,” Vogel said, while up to 10% of production is likely to use ethanol.

How is SAF supply meeting demand and what incentives are in place to boost production and adoption? Access our data analysis on US SAF production patterns and credit pricing trends.

The rise of alcohol-to-jet fuels technology and efuels

There are a number of approved pathways to producing SAF, with the most common form currently using a process of hydrotreated esters and fatty acids (HEFA) that requires vegetable oil or waste-based oils.

More recently, however, excitement around alcohol-to-jet technologies has encouraged corn and sugarcane ethanol producers to hope they have a path into SAF production.

Hydrogen can also be used to produce so-called efuels that pull waste carbon from a range of sources, process it with the hydrogen and then use chemical processes, such as Fischer-Tropsch, to produce liquid fuels.

The Rabobank report says that oilseed rape and sugarcane are the most “economically attractive feedstocks in Australia, both in cost terms and in the cost per unit of emissions reduced, but the use of grain could also be promising, along with municipal waste and cellulosic waste such as sawdust.

The report says that, for at least the next decade, “SAF can generate more demand for agricultural products and economic benefits for farmers,” but warns that this may change in the 2030s.

“In the longer term,” the report says, “the agricultural winners may lose out to non-agricultural feedstocks as other technologies advance and improve their efficiency and economics.”

For the moment, while much of Australia’s SAF demand is being driven by airline demonstration flights, demand within the country is expected to rise on the back of combined voluntary efforts from the airlines driven by the expected government incentives.

View our biofuels and feedstocks news, prices and analysis

The post Rabobank highlights ‘global’ SAF upside for Australia’s agriculture sector appeared first on Fastmarkets.

Vietnam is one of the biggest corn importers in the world, feeding not just the domestic population but also the country’s huge livestock and aquaculture sector, which underpins substantial imports of corn, feed wheat, meals and other proteins.

The USDA called for feed demand in the 2025 calendar year to reach 27 million tonnes, with 20.9 million tonnes going into animal feed, while 6.1 million tonnes would go to aquaculture.

That would represent a rise of nearly 2% over the 2024 figure, with the bulk heading into aquaculture. Demand here was expected to go up by 7.5% year on year, compared with the more modest 0.4% increase in livestock feed.

For 2024, the USDA estimated total feed demand of 26.5 million tonnes, up by slightly less than 2.5% compared with 2023, when figures were revised lower following a slowdown in demand from key customers. But livestock demand jumped by 3.4% to 20.87 million tonnes.

Aquaculture also showed strong signs of recovery in 2024, with demand up by 7% compared with 2023 to 5.67 million tonnes.

The move came with demand recovering in some of Vietnam’s key export markets, such as the US, China and the EU, prompting the agency to predict “aquaculture and livestock production to rebound in MY 2024/25, increasing overall feed demand.”

Feed ingredient Imports

The agency noted that 75% of all feed ingredients in Vietnam must be imported, creating expectations that demand for feed components, particularly corn, would be likely to recover, raising import outlooks.

Total import demand for feed ingredients was expected to increase by almost 7.2% in 2024 to 19.8 million tonnes, and by 2.6% in 2025 to 20.3 million tonnes, with local supply steady around 6.7 million tonnes across 2023, 2024 and 2025.

Corn was expected to provide the majority of that import volume, up by nearly 5% in 2025 to 8.2 million tonnes (40% of the import total) while 2024 was expected to show an increase of 4.3% to 7.8 million tonnes (around 39.5% of the import need).

Feed wheat demand was expected to recover in 2024 before declining in 2025, amid stronger competition from relatively cheaper corn prices, the USDA said. Imports were expected to increase by 3.4% to 2.3 million tonnes in 2024, then to slip by 5.5% to 2.19 million tonnes.

Soybean meal was expected to provide the second-largest portion of the feed ration over the period, rising by 3.2% to 5.8 million tonnes in 2024, and then by 2.9% to 6 million tonnes in 2025.

Vietnam has traditionally been a major buyer of corn imports from South America, with the development of Brazil and Argentina as major producers dovetailing with the rise of Vietnam as a major regional hub for protein exports.

But the trade was hit hard by two pandemics – the onset of African swine fever in 2018 that hit the world’s pork supply hard, before the arrival of Covid-19 at the end of the following year.

Russian invasion impacts grain prices

Since then, Russia’s invasion of Ukraine in February 2022 has driven grain prices sharply higher amid fears of shortages, before bumper corn harvests in the US and Brazil, and record breaking wheat harvests in Australia and Russia, alleviated some of the pressure.

Nonetheless, Vietnam has seen imports rise from non-traditional regional importers, such as Pakistan, India and South Africa, while Brazilian imports have surged, edging out Argentina’s dominance in the country amid its own struggles with drought.

Alongside the increase in options for corn imports, the USDA also highlighted the rise of Brazil as an exporter of dried distillers grains (DDGS). These are corn-based animal feeds that are a by-product of ethanol production.

That reflects a rising tide of corn-based ethanol production in some of the South American country’s biggest corn-growing states. Brazil provided 17% of Vietnam’s total DDGS imports in 2023, up from nil in previous years, according to Vietnamese customs data.

The USDA is already calling for Vietnam’s corn imports to reach their third-highest level ever in the 2023-24 marketing year, with 10.3 million tonnes predicted to be imported, behind only 2020-21’s 13.5 million tonnes, and 2019-20’s 10.6 million tonnes.

The post USDA calls for Vietnam’s aquaculture and livestock feed demand ‘to rebound in 2024-25’ appeared first on Fastmarkets.

“The sustainable aviation fuel (SAF) market really is going to drive this area over the next few decades and we have to be aggressive if we’re going to get it,” he continued, echoing a range of presenters that laid out the opportunities – and challenges – that the sector faces.

While typical campaigns, including the year-round rollout of a 15% ethanol blend known as E15 and potential expansion into the marine fuels space, were still evident during the conference – the discussion was dominated by SAF.

Expansion to 3 billion gallons by 2030, 36 billion gallons by 2050

Jimmy Samartzis, the CEO of SAF producer start-up LanzaJet, told delegates that current SAF output in 2023 reached 13 million gallons – amounting to 0.06% of total demand.

The target would require expansion to 3 billion gallons by 2030, potentially followed by a ten-fold increase to 36 billion gallons over the twenty years following.

Samartzis – who leads a company that just started up its Freedom Pines SAF facility earlier this year – argued that only ethanol carried the sort of promise that would be required to make that expansion feasible.

Corn-based ethanol offered versatility and flexibility and almost unlimited feedstocks at a cost-effective price.

Moreover, while electrification will continue to penetrate the car fleet, “aviation has no other option,” Samartzis said, with only limited scope for technological advances to lower emissions.

That means up to 65% of emissions reductions will have to come from the fuel – a figure echoed by Marykate O’Brien, senior sustainable fuels consultant at Southwest Airlines.

Airlines could address some emissions by switching all airside ground transportation to electric vehicles or alternate powertrains, or upgrading aircraft and engines to more fuel-efficient models, but the bulk of emissions reductions would have to be achieved through the fuel.

Over 50% of Southwest’s emissions reductions are going to need to come from the fuel and the use of increased renewable fuels, but incentivizing investment would be critical, and ensuring a route to compliance for the fuels remained another consideration.

“We need science-backed life cycle assessments so we can get fair accounting,” O’Brien told the conference, adding that SAF was the only tool in the current arsenal that could “start having an impact right away.”

Following on from LanzaJet, fellow SAF producer start-up Gevo built on the views, showing a forecast that showed US SAF fulfillment could reach close to 25 billion gallons per year, with ethanol-to-jet technology supplying up to 20 billion gallons of fuel by 2050.

Moreover, the cost of production of ethanol-based SAF would likely land at the upper end of fossil jet fuel production – putting it roughly on par.

However, against alternative SAF processes, alcohol-to-jet approaches would land substantially under rival vegetable oil, used cooking oil or animal fat-based HEFA production, and far below the expected cost of power-to-liquid efuels such as hydrogen, according to Gevo’s Dr. Paul Bloom.

The initiatives were fully endorsed by the government, with the current Secretary of Agriculture, Tom Vilsack, lending his views to the adoption of corn in delivering huge SAF mandates, while also using it to shore up the wider US farming sector.

Noting that, since 1980, 165 million acres of worked farmland has been lost, Vilsack argued that expansion into SAF could represent a “new opportunity for rural America,” during his speech to the conference.

Efforts to produce 36 billion gallons of SAF by 2050 would be a “tremendous opportunity for America to define the economy of the 21st century,” he said, although he offered no thoughts on one of the major obstacles complicating ethanol adoption – a lack of compliance pathways.

Obstacles in using corn as a feedstock for SAF

While the SAF sector promises to be a major opportunity and outlet for ethanol, there remain thorny challenges ahead, with the conference kicked off by a call to arms from the Renewable Fuels Association’s president and CEO, Geoff Cooper.

Under both of the main GHG emissions models that define the eligibility of a feedstock for critical tax credits, US corn only qualifies under the US-defined GREET model – and only then when carbon capture and storage (CCS) is factored in as well.

Under the rival CORSIA compliance scheme, corn-based ethanol does not qualify as a feedstock for aviation, falling well short of the minimum required savings once calculations of indirect land use change are factored in.

Cooper argued that the science behind CORSIA’s assumptions was flawed and called for a review, while panels during the conference discussed other ways to lower the carbon footprint of corn through the use of less emissions-intensive farming practices or fertilizers.

Currently, despite the goodwill and best-laid plans, US corn as a feedstock to SAF production looks to be an unattractive option and is likely to slow investment in production capacity unless the pathway for corn is improved.

That effect could be doubled by the European Union’s prevailing policy of banning crop-based feedstocks in future biofuel feedstocks, although that legislation is being challenged in court by European ethanol producers.

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