Falling Malaysian palm oil prices put pressure on the Ukrainian sunflower oil market

Malaysian palm oil futures are falling for the third consecutive session, falling to a near 2-month low yesterday amid weak exports and falling prices for competing vegetable oils, which is putting pressure on sunflower oil prices in Ukraine.

May CPO palm oil futures on the Bursa Malaysia exchange fell 3% to 4,245 ringgit/t or $975/t on Monday, the lowest level since January 27.

Malaysian palm oil exports fell 8.47% in the March 1-25 period from February, according to Amspec Agri Malaysia, while Intertek Testing Services estimated the decline at 8.1%. The decline marks the third consecutive month of declines amid seasonal production increases, adding to pessimism in the palm oil market, where the premium relative to soybean oil is shrinking amid falling demand.

On the Dalian Commodity Exchange, the most active palm oil contract CPO1 fell by 2.07%, and soybean oil fell by 0.86%.

May soybean oil futures on the Chicago Board of Trade have risen 0.7% to $932/t since Monday, but have remained stable for two weeks in anticipation of Trump’s decision to impose tariffs from April 2.

Falling palm oil prices are putting pressure on neighboring soybean and sunflower oil markets, especially in India, leading to a further drop in sunflower oil prices.

According to Trading Economics, the average price of sunflower oil delivered to buyers fell by 0.8% to $1,325/t since Monday, and by 4.5% overall for the month, indicating a shift by buyers to cheaper alternatives.

In Ukraine, demand prices for sunflower oil delivered to Black Sea ports also decreased to $1,125-1,130/t. In addition, there is a further reduction in demand from European buyers.

Tags: Malaysia, palm oil, Ukraine, sunflower oil, prices