During the week, prices for palm oil fell by 8.3%, and for soybean oil – by 7.8%

Global vegetable oil markets remain under pressure from forecasts of a record soybean crop in South America, reduced demand and processing volumes of soybeans in the United States, as well as permission for year-round sales of gasoline with high ethanol content.

February futures for palm oil on the Bursa exchange in Malaysia yesterday fell by 4.3% to 4529 ringgit/t or 1014 $/t (-8.3% since the beginning of the week, -13.3% for two weeks) amid falling demand, not responding to the increase in the export base price in Malaysia and the introduction of the standard B40 from January 1 in Indonesia.

Indonesia’s intentions to increase the share of palm oil in biofuels from 35% to 40% from January 1, 2025 significantly supported the quotes, but the reduction in palm oil exports from the country in November by 11.2% to 2 million tons negatively affected prices.

Malaysia has left the export duty on crude palm oil for January at 10%, but increased the base price from which the duty is calculated, from 4471,39 to 5001,72 ringgit/t (1120,96 $/t).

January futures for soybean oil on the Chicago stock exchange this week fell 7.8% to 870 $/t (-5% for two weeks) amid a reduction in soybean processing in the United States in November by 11% and improved prospects for the soybean crop in South America.

Unveiled on Tuesday, the bill on financing the U.S. government contains a plan that allows year-round sale of gasoline with high ethanol content (E15), which will be a victory for lobbyists of corn and ethanol. Traders believe that active blending of corn-based ethanol could reduce demand for soybean oil, which is used to produce biodiesel.

On the stock exchange in Dalian, the most active contract for soybean oil fell by 3.75% to the lowest since September level – 7590 yuan or 1041,74 $/t amid increased soybean supplies and reduced demand within China.

Decrease in demand for vegetable oils from the EU increases the pressure on prices in Ukraine.

According to the European Commission, in MY 2024/25  (as of December 15), the EU countries increased the imports of oilseeds by 12% to 22.1 mln tonnes compared to the same period of the previous season, but decreased the imports of vegetable oils by 19%, in particular soybean oil – by 64% to 111 thsd tonnes, rapeseed oil – by 52% to 114 thsd tonnes, sunflower oil – by 16% to 927 thsd tonnes, and palm oil – by 16% to 1.422 mln tonnes.

According to Trading Economics, the average price of sunflower oil for delivery to buyers on Monday fell by 1.8% to 1257 $/t (-4.2% for two weeks).

Forecasts of increased soybean supplies in 2025 continue to put significant pressure on world prices for edible oils.

Tags: soybean oil, prices, palm oil, rapeseed oil, sunflower oil