Brazil has significantly increased pressure on the global vegetable oil market due to a record soybean harvest and rapidly expanding processing volumes. After accumulating large soybean oil stocks, the country began aggressively increasing exports at discounted prices, affecting global vegetable oil quotations. Analysts note that the discount on Brazilian soybean oil has reached its widest level since 2023.
One of the main reasons behind the oversupply is the delay in raising Brazil’s mandatory biodiesel blending rate on the domestic market. Authorities were expected to increase the biodiesel blend requirement from 15% to 16%, but the decision has not yet been implemented. As a result, significant volumes of soybean oil that were originally intended for domestic consumption have been redirected to export markets.
According to international analysts, Brazil could harvest more than 176 million tons of soybeans in the 2025/26 marketing year — one of the highest production levels in the country’s history. The record crop is stimulating crushing activity and sharply increasing soybean oil supplies on the global market. The main buyers of Brazilian soybean oil remain India, China, Bangladesh, and North African countries.
Market experts believe Brazil’s aggressive pricing strategy could create additional competition for sunflower oil exporters, particularly Ukraine and Argentina. At the same time, falling soybean oil prices are influencing the entire vegetable oil sector and may reshape global demand balances between soybean, palm, and sunflower oils.