To develop a low-income region, the Brazilian Government will start a bio-diesel program in 2008. The government will provide castor beans, palm oil, sunflowers, cotton, peanuts, and soybean as the raw materials for bio-diesel production. Because of their favorable production costs and production levels, soybean have certain advantages over other crops in the production of bio-diesel. Our study is the first to evaluate the impact the Brazilian bio-diesel program will have on the domestic soybean and soybean products markets, by applying a newly developed world soybean and soybean products model. Our simulation suggests moderate impacts on the world soybean and soybean products markets.


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