Minister of Mines and Energy of Brazil Alexandre Silveira speaks during an interview during CERAWeek by S&P Global in Houston, Texas, U.S. March 21, 2024.

Brazil's national energy council has decided to keep the local mandatory biodiesel blend into diesel at 14% from March instead of raising it to 15% as previously expected, Energy Minister Alexandre Silveira told reporters.

Most of Brazil's biodiesel comes from soybeans after it is processed into soyoil.

StoneX, an agribusiness consultancy, halved its forecast for the annual increase in Brazilian biodiesel sales after the announcement.

Had the mix been increased to 15%, biodiesel sales would have grown by 1.2 million cubic meters (mcm), totaling demand of 10.2 mcm in 2025.

After extending the 14% blend throughout 2025, the annual growth in sales is now seen at 600,000 cubic meters, with demand expected at 9.6 mcm, StoneX said.

The minister told reporters after a meeting of the council that the mix of the biofuel into diesel would remain at 14% "until further deliberation, which can be taken at any time."

Silveira cited concerns relative to the price of food as justification for the move. The government has been worried about high food prices, which affected President Luiz Inacio Lula da Silva's approval ratings.

"President Lula's government has a big priority: feeding people fairly and minding food prices," Silveira said.

Abiove, a national oilseed lobby representing global soybean processors, said the decision to maintain the 14% was based on the prices of soybean oil to the final consumer.

However, it said the prices of packaged soybean oil, as well as biodiesel, are already falling, reflecting the favorable scenario arising from this year's record soybean harvest.

Abiove said it expects the government to review its decision "as quickly as possible."