Over the past four years, soybean oil experienced a dramatic bull market that took prices to a new record high -- over 80 cents a pound in April 2022. Roughly two years later, those peak prices were cut nearly in half as the bullish excitement of becoming part of a new market for low-carbon fuel gave way to regulatory disappointments and the reality of competing feedstocks. This year, as recently as late June, August soybean oil prices were trading near their lowest level in over three years and it seemed as if the market had lost its appreciation for soybean oil's new role as a low-carbon fuel, as well as its traditional use as a source of food.

While those of us in the U.S. were focused on the disappointment of the Environmental Protection Agency's (EPA) lower-than-hoped-for Renewable Fuel Standard (RFS) mandate in the summer of 2023 and the federal government's restrictive guidelines for using soybean oil as a feedstock for the production of Sustainable Aviation Fuel (SAF), it is important to realize the U.S. is not the only market in search of a low-carbon fuel.

In a 2023 report on renewable fuels, the International Energy Agency pointed out that while the U.S., European Union, Canada and Japan are promoting increased use of biofuels, most new biofuel demand is coming from emerging economies like Brazil, Indonesia and India (see https://www.iea.org/… ). The relatively new practice of turning plant oils into biofuels is a global event, which means soybean oil prices benefit directly from their increased use in the production of renewable diesel in the U.S. and are also in position to benefit from the increased use of all plant oils for making biofuel.

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