Biofuel Expansion Boosts Energy Attribute of Agricultural Products

Global biofuel production is expanding rapidly, with major producers emerging in the United States, Brazil, and the European Union. Goldman Sachs forecasts that global biofuel output will reach approximately 3.5 million barrels per day by 2026, with about 95% of this volume destined for transportation.

The 'energy attribute' of agricultural products is strengthening as a result of the shift in demand structure for commodities like corn, soybeans, and sugar. High oil prices are further reshaping global agricultural supply-and-demand dynamics by altering the allocation of feedstocks like sugarcane and corn.

Mandated blending policies have become the primary driving force behind the industry's growth, linking energy markets to agricultural prices. In 2024, ethanol accounted for approximately 60% of global biofuel consumption, with the United States focusing on corn-based ethanol and Brazil primarily producing sugarcane and corn ethanol.