A rise in online orders during the COVID-19 pandemic has given a boost to soyabean oil futures, Bloomberg reported on 16 September.
The surge in online orders had boosted miles for trucks, usually powered by diesel and its green alternatives. However, restaurant shutdowns led to a reduced amount of cooking oil for use as a feedstock and renewable diesel makers had turned to soya oil.
Soya oil futures traded in Chicago had rallied almost 40% since a low in March, when lockdowns in the USA had hit demand for most commodities. The US Department of Agriculture was already forecasting its use to make biodiesel would jump more than 3% this season after declining a year earlier, Bloomberg said.
“Truck traffic has been moving along,” said Mac Marshall, vice president of market intelligence for the United Soybean Board and the US Soybean Export Council.
“I’m probably going to get five Amazon packages at my door today. When you think about the long-haul truck fleets, those are primarily consuming diesel so the demand on the biodiesel side hasn’t abated.”
While traffic for passenger cars had dropped and was still down 16% from a year earlier in the week ended 30 August, truck miles were up 5%, according to Department of Transportation data.
The shutdown of meat plants across the USA earlier in 2020 had also reduced the amount of animal waste available for use as a feedstock in renewable diesel.
“You’ve had a decline in slaughter in the second quarter, which meant less available supplies of feedstock on the rendering side, but you are also having less restaurant traffic and lower repurposed grease volumes,” Marshal said.
“That’s been an opportunity for soyabean oil to get bid up as a feedstock, so we’ve seen a nice price appreciation.”