US soyoil prices jump as China reduces export incentives for biofuel feedstocks competing with US soyoil
U.S. Soyoil Futures rose 2% on the Friday after China announced it would reduce export incentives for certain products, including used cooking oils. Used cooking oil is a low-cost source of feedstock that U.S. Biofuels Makers use instead domestically produced soybean oil.
China's Finance Ministry said that it will reduce or cancel export-tax refunds beginning next month. This includes some refined oil products, which traders have said include used cooking oil (UCO).
This announcement is the latest wildcard in the U.S. renewable energy producers' and feedstock suppliers' game after Donald Trump won his presidential election. His trade policies and domestic agenda may disrupt global trade.
Analysts said that China's move comes at a time when global vegetable oil supplies are tightening, and prices are rising.
After four days of losses, the December soyoil price on the Chicago Board of Trade rose 2% to 45.35 cents a pound. This was after the market had fallen from its seven-month highs reached following the election.
Market analysts and vegoils trader caution that China's decision to cancel the export tax rebates will only marginally reduce U.S. imports as UCO would remain one of the cheapest feedstocks in many U.S. plants.
The price increase will not have a significant impact on the UCO supply as they will still be selling at a lower rate than other feedstocks. Kent Woods, CrushTraders owner, said that there is still room for pricing to allow them to get the large bulk orders they require.
It's more of a gesture rather than a change in usage patterns."
Census Bureau data shows that the U.S. imported used cooking oil nearly doubled in the first nine month of 2024 compared to the previous year.
The data indicates that more than half of all shipments originate from China. Karl Plume reported from Chicago and P.J. Huffstutter and Gus Trompiz, both in Chicago; Jan Harvey and Rod Nickel are the editors.
(source: Reuters)
