Decline in oil prices stopped the growth of prices for vegetable oils, but sunseed in Ukraine continues to rise in price

In the October report, USDA experts left the forecast of global vegetable oil production in MY 2024/25 at 227.12 mln tonnes (222.42 mln tonnes in MY 2023/24, 216.8 mln tonnes in MY 2022/23 and 208.62 mln tonnes in MY 2021/22), as the slight decrease in palm oil production is offset by the increase in sunflower and rapeseed oil production.

However, as a result of the balance sheet adjustment for MY 2023/24, palm oil stocks were reduced by 1.5 mln tonnes, resulting in the reduction of the global ending stocks estimate from 30.36 mln tonnes to 28.8 mln tonnes (compared to 30.29 mln tonnes in the previous season).

This significantly supported the price of palm oil in Malaysia, where on Friday on the data of the report, the December futures rose by 2.8% to 4350 ringgit/t or 1015 $/t, but yesterday amid falling oil prices fell by 0.9% to 4313 ringgit/t or 1006 $/t.

December futures for Brent crude oil yesterday fell 2.6% to 77 $/barrel and continue to fall on negative statistics from China, as traders did not appreciate the new plan presented by the Chinese government on Friday to stimulate the economy.

According to China Customs, in September the country reduced oil imports by 7.4% compared to August due to low refining margins. At the same time, imports of vegetable edible oils since the beginning of the year fell by 24.1% to 5.391 million tons compared to the same period in 2023.

Recall that India, after the increase in import duties, reduced in September (compared to August) the import of vegetable oils by 33% to a 6-month low.

December futures for soybean oil on the Chicago stock exchange yesterday fell 3.6% to 923 $/t (-5% for the week, +7.4% for the month) amid improving conditions for sowing soybeans in Brazil.

Ukrainian farmers are completing the harvesting of sunseed, which as of October 10, from 4.31 million hectares or 87% of the area harvested 8.78 million tons with a yield of 2.04 t/ha. It is already clear that the projected 12.5 million tons will not be harvested, so processors are gradually raising purchase prices.

During the week, the purchase prices for sunseed with 50% oil content increased by another 1000 UAH/t to 24000-25000 UAH/t with delivery to the plant, but deals were also recorded at higher prices.

During the same period, the demand prices for sunflower oil increased by 20-30 USD/t to 1020-1040 USD/t, and for meal – by 5-8 USD/t to 215-225 USD/t with delivery to the Black Sea ports. The demand for Ukrainian sunflower oil is mainly from the EU, while the demand prices for oil supplies to China remain at a low level of 1000-1100 $/t.

As a reminder, the historical maximum of sunseed prices in Ukraine was recorded in March 2021, when they reached 25500-27400 UAH/t with delivery to the plant.

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Tags: China, sunflower oil, prices, India, Malaysia, sunseed, palm oil, edible oils, Ukraine