After the EPA soybean boom, “sustainable soybeans” have become the new hit. While they may sound similar in principle, their uses are different. Whereas EPA soybean was used in biodiesel for the US market, sustainable soybeans cater to EU regulations.
Although the meaning of “sustainable” is exaggerate for
this type of soybean, it gets its name from its aim of
mitigating greenhouses gasses emissions. These soybeans
must come from fields that have not been deforested
since 1st of January 2008. In Argentina,
almost 85% of agriculture lands meet that condition,
but traceability is required for it to be classified as
apt for production of “sustainable soybeans”.
The main benefit for producers is that they get a
better price, which may courage producers to sell their
beans. There are still more than 17 million tons of
soybeans from 2016/17 season, of which 15 million are
expected to carry over to the next marketing year.
Depending on lot size, sustainable soybeans can get a
USD 3 to USD 5 per ton spread over cash prices. Current
cash bids stand around USD 252.7 per ton, which means
that sustainable soybeans are worth about USD 255 to
USD 257 per ton.
Although an average spread of USD 4 per ton might not
seem too much, it has a significant effect on profit
margins, as the following table shows.
As far as demand goes, the EU has already been
importing soybean-based biodiesel. Unofficial figures
put total exports to that destiny over the months of
September and October at around 260,000 tons, and
traders remain optimistic for the future if export
taxes are to be reduced as planned.
As in the case of EPA soybeans, if Argentina has the possibility to export
biodiesel to the European Union, the farmer should take advantage of the
possibility to obtain an extra profit from “sustainable soybeans”