A proposed increase in US biofuel blending could shake global soybean markets, triggering tighter supplies and rising prices across Asia’s food and feed sectors, reports Food Navigator Asia.
Earlier this year, the US Environmental Protection Agency (EPA) put forward a plan to significantly raise the amount of biodiesel and renewable diesel that must be mixed into traditional fuels in 2026 and 2027. The plan would increase the current blending volume from 3.35 billion gallons to 5.61 billion gallons in 2026—a jump of 67%. For 2027, the volume would rise further to 5.86 billion gallons.
Luiz Fernando Roque, a market analyst at Hedgepoint, said such a sharp increase in demand for biofuels could dramatically alter how soybeans are used in the US. With more soybeans needed for biofuel production, there could be less available for export.
The EPA is accepting public feedback on the proposal until August 8, and a final decision is expected afterward.
“Even though it’s early in the approval process, the market is already reacting,” Roque said. “We’re seeing movements in soybean futures contracts in Chicago, and that could continue until the EPA finishes reviewing public comments.”
Soybean futures—agreements to buy or sell soy at a future date—have already shown volatility as traders try to anticipate how the proposal might affect prices. These market shifts could have ripple effects across Asia, where many countries rely on soybean imports.
Countries such as China, Japan, South Korea, and others in Southeast Asia are major importers of soybeans and soy-based products, which are widely used in animal feed and food processing. A surge in US domestic soybean use could reduce the amount available for export, putting upward pressure on global prices.
While some Asian countries do grow soybeans, most—including China and Japan—depend heavily on imports to meet demand.
Analysts at Hedgepoint warn that if even half of the planned increase in US soybean processing capacity goes ahead, it would still significantly reduce the volume available for export. This could leave Asian importers scrambling to secure supplies in an already unstable market.
The timing of the EPA proposal adds to concerns in Asia, where food and feed producers are already dealing with unpredictable commodity prices. Ongoing geopolitical tensions, including the US–China trade war and conflicts in the Middle East, have contributed to price swings that make planning and budgeting more difficult for businesses.
Because many Asian markets rely on US soybean exports, they are especially vulnerable to any major changes in US policy.
To meet growing domestic demand, US soybean processors are already taking action. Several projects to expand soybean crushing capacity are in progress, with new or expanded plants planned in South Dakota, Kansas, Illinois, Ohio, and Louisiana.
These facilities would help convert soybeans into oil for fuel and meal for animal feed, potentially easing some of the pressure on supply—but not enough to offset the impact on exports, analysts suggest.
As the EPA reviews public feedback, markets across the globe will be watching closely. Any final decision could reshape the global soybean trade—and its consequences may be felt most in Asia.
