Friday's USDA report was truly a non-event for the supply side as it simply reconfirmed that the world has ample inventories of oilseeds and vegetable oils. Now that we have a good idea of supply, we should look at the demand side, and it is not pretty for a number of reasons. Starting with Germany, the data regarding Biodiesel/HVO consumption for the first half of 2024 shows a continued declining trend with only 1.2 million MT blended, which is a decline of 7% compared to 2023. This would put the full-year forecast at 2.4 million MT, which is the same volume as 2019. There are a lot of additional reasons to explain the lack of Biodiesel/HVO use in 2024 Vs 2019, with double and even triple counting, as well as UER offset when comparing. It should be noted that the use of B7 in Germany was down 5% for the same period, reflecting declining use of Diesel overall. On the other hand, Bioethanol use in gasoline grew 8.3% in the first 6 months of the year compared to the year before. This explains why many German biodiesel/HVO producers are eyeing other markets in Europe for growth.
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