A sharp increase in the prices of palm and soybean oil will significantly support the demand for sunflower oil

Usually, sunflower oil remains strongly undervalued compared to soybean oil, especially Ukrainian oil, which is very difficult for sellers to sell, despite a significant reduction in production in the current season.

During the week, stock exchange quotes for palm oil and soybean oil rose by 10% and 8.4%, respectively, while demand prices for Ukrainian sunflower oil increased by only 3-4%.

Asking prices for deliveries to Bulgarian ports for the week increased by 4.3% from $1,150/t to $1,200/t DAP, while asking prices at Ukrainian ports remained at $1,000-1,050/t CPT due to reduced demand amid strong missile attacks and uncertainty with the further work of the grain corridor after November 18.

High soybean oil prices will support demand and prices for sunflower oil, which remains undervalued and hard to find for buyers due to logistical issues. If the grain corridor continues to operate, traders will intensify the purchase of sunflower oil in the ports of Ukraine. But another shelling of the Vaiterra oil terminal in Mykolaiv destroyed part of the oil and caused new losses, which increased traders’ pessimism about further purchases.

December palm oil futures on the Malaysian exchange rose 10.2% for the week to a one-month high of 4,116 ringgit/t, or $872/t, on heavy downpours hampering production and logistics in Malaysia and Indonesia and India’s intention to raise tariffs on the import of palm oil, which activated short-term demand.

December soybean oil futures on the Chicago Stock Exchange rose 8.3% for the week to a 4-month high of $1,564/t amid strong U.S. soybean processing and a recovery in biodiesel demand after another jump in auto fuel prices.

December Brent oil futures are trading, as they were a week ago, at $93/barrel under the pressure of Biden’s decision to continue oil supplies from strategic reserves and intentions to limit Russian oil prices with another package of sanctions.

Tags: palm oil, USA, Ukraine, sunflower oil, soybean oil, prices, soybean, India, Malaysia