Declining crude oil and vegetable oil prices lower prices for sunflower seeds and oil in Ukraine
Trump’s imposition of tariffs on goods from Canada, Mexico, and China, as well as threats to impose tariffs on goods from the EU, led to a fall in the US stock market and crude oil and vegetable oil prices due to increased risks of a slowdown in the US and global economies.
May Brent crude futures fell 2.1% to $71/barrel in the week and lost 6.3% in two weeks on expectations of a decline in global demand due to a global economic slowdown and disruptions to supply chains. Prices are also under pressure from the news that OPEC+ will continue its planned production increase in April.
April palm oil futures on the Bursa exchange fell 3.1% yesterday to a monthly low of 4,349 ringgit/or $975/t (-5% for the week). Weak export demand at the start of Ramadan and forecasts of increased palm and soybean oil production in the second half of the year are adding pressure on vegetable oil prices.
According to dealers, India increased palm oil imports by 36% in February compared to January (when it fell to the lowest level since March 2011).
May soybean oil futures on the Chicago Board of Trade fell 7.5% to $943/tonne in the week (-6.5% in the month) amid improving harvest prospects in South America and China’s imposition of a 10% tariff on American soybeans.
In Ukraine, this week, sunflower oil demand prices decreased by $10-20/t to $1,100-1,120/t delivered to Black Sea ports, as a result of which sunflower purchase prices fell by UAH 400-500/t to UAH 26,500-27,000/t (delivered to the plant at 50% oil content). A drop in feed corn prices by $5-8/t led to a decrease in sunflower meal prices by $5-6/t to $215-220/t delivered to the port, which reduces processing margins and increases pressure on sunseed purchase prices.
The decline in soybean and palm oil prices will put pressure on sunflower oil prices, which will continue to fall in the near future, especially against the backdrop of the start of the sunflower harvest in Argentina.
Further development of the grain sector in the Black Sea and Danube region will be discussed at the 23 International Conference BLACK SEA GRAIN.KYIV on April 24 in Kyiv.
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