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Biodiesel Demands Fuel Growth in Food Markets

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Food markets are facing an historic boom as consumer demand for biodiesel and biofuels is rising nationwide, according to industry researchers.

Consumer needs are driving up demand for vegetable oils, leading to higher prices for vegetable oils relative to meals and causing soybean crushers to reevaluate their business models, according to Rabobank’s Food and Agribusiness Research group.

In fact, Dr. Alejandro Reca, executive director of the research group in the Americas, predicts that the recent income gains in the global vegetable oil sector will continue over the long term.

“Biodiesel is proving to be a significant demand shifter in the overall vegetable oil industry, but the canola and palm sectors will benefit more proportionally from this growth, thanks to their high oil content and the oils’ multiple uses as food and foodstock,” Reca said in a PRNewswire report.

“The tremendous opportunities presented by biodiesel today are attracting non-traditional investors to the agribusiness sector, such as financial institutions and private equity firms, as well as traditional energy and agribusiness players,” Reca said.

“Today’s market conditions create the ideal environment for investment in and promotion of alternatives to petrofuels, and biodiesel in particular is attracting significant support on both the supply and demand side. As a result, the growth in the biodiesel market has economic and commercial implications far beyond just the energy markets, from increasing production and creating new trade flows for vegetable oils, to attracting new investors to the agribusiness sector, and ultimately to increasing the integration of global agricultural and energy markets,” concluded Reca.

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