Global agribusiness giants Cargill and Bunge have reduced their purchases of soyabeans due to uncertainty over the US biofuels policy, Bloomberg wrote.
Lack of guidance for a new clean fuel tax credit in the USA has led biofuel producers to delay purchases of soyabean oil, which is used as a feedstock in renewable fuel production, until early 2025, according to the 28 October report.
In mid-October, most fuel retailers had procured only about 10% of their biodiesel for the coming first quarter compared to more than 80% in that time over the past decade, David Fialkov, executive vice president of government affairs for NATSO, a trade group for truck stops and transportation energy centres, was quoted as saying.
However, Cargill said the uncertainty around biofuel policy heading into 2025 had not impacted its rate of soyabean purchases.
At the time of the report, Bunge declined to comment.
The industry was waiting for the Treasury Department to issue guidance for the clean fuel production credit set to start in January, the report said.
Issues dividing the industry include whether the tax incentive, known as 45Z, will be available for low-carbon fuels made from overseas-sourced biofuel ingredients, like waste animal fat and used cooking oil that compete with soyabeans and other US-grown crops, according to the report.
There was still uncertainty if the 45Z credit would be extended beyond its current expiry at the end of 2027, Bloomberg wrote.
Producers were not keen to order large quantities of soyabean oil until the guidance was published, No Bull Inc grain analyst Susan Stroud was quoted as saying.
With uncertainty over the new subsidy, crushing companies have been diverting a larger share of soyabean supplies to food export markets, according to CrushTraders CEO Kent Woods.
That dynamic was also creating a big shift, with the USA resuming soyabean oil exports, Bloomberg wrote.
