Decrease in prices for palm oil by 9% and soybean oil by 3.6% per week will increase pressure on sunflower oil prices

The 3.7% drop in oil prices over the week increased pressure on palm oil prices, which were very overbought. The decline in palm oil prices will allow it to compete with soybean oil and strengthen its position in the Indian market, which is increasing imports of sunflower oil.

Speculators are closing short positions in oil and palm oil, which were opened on expectations of escalation in the Middle East, which could end in a full-scale war between Israel and Iran.

June futures for Brent crude on the London ICE Futures exchange fell by 3.7% to $87.4 per barrel over the week (+2.8% over the month) and could fall even further if Iran does not escalate the situation. The decision of the US Congress to provide aid to Ukraine and Israel will make Iran and Russia understand that Western countries will not allow them to violate the world order with impunity.

the June futures for palm oil on the Bursa exchange in Malaysia for the week fell by 9% to 3926 ringgit/t or 821 $/t (-10.6% for two weeks) amid slowing exports and falling prices for soybean oil.

the may Futures for soybean oil in Chicago for the week fell by 3.6% to 978 $/t (-10% for two weeks) amid the progress of soybean harvest in Argentina and lower prices for soybeans.

According to Trading Economics, the average price of sunflower oil for delivery to buyers for the week fell by 0.7% to 867 $/t (-2% for two weeks), in particular in Ukraine – by 5-10 $/t to 790-800 $/t with delivery to the ports of the black sea, 840 $/t with delivery to Bulgaria and 870-880 $/t with delivery to Italy

According to the vegetable oil producers Association of India (SEA), in 5 months of 2023/24 MY the country increased the imports of sunflower oil by 20.9% to 1.35 mln tonnes, and decreased the imports of palm oil by 22.9% to 2.59 mln tonnes and soybean oil by 39.6% to 882.94 thsd tonnes.

At the same time, Russia increased supplies of sunflower oil to India by 53.7% to 490,62 thousand tons, Romania – 3.2 times to 486,78 thousand tons, Argentina – 2.3 times to 165,92 thousand tons.

On Friday, Russia attacked two oil extraction plants in the port of Pivdennyi to reduce exports of sunflower oil from Ukraine and gain an advantage in the world market for sales of Russian oil. After the “gas war” with Europe in 2022 and the “grain war” with Ukraine in 2022-23, Russia launched a new war against Ukrainian sunflower oil.

Tags: sunflower oil, soybean oil, prices