Falling palm oil prices increase pressure on sunflower oil and sunіseed prices in Ukraine

Fall in prices of Malaysian palm oil is accelerating, and yesterday February futures on the Bursa exchange fell by 1.2% to 4758 ringgit/t or 1070 $/t (-7.6% for the week) amid declining demand, especially from India, which has stepped up purchases of cheaper soybean and sunflower oil.

According to the estimates of surveyors ITS and AMSPEC, Malaysia in the period 1-15 December reduced the export of palm oil compared to the same period in November by 6.7-9.8% to 660-671 thousand tons.

At the same time, India increased imports of vegetable oils in November compared to October by 12% from 1.459 mln tonnes to a record 1.628 mln tonnes, in particular sunflower oil – by 43% to 341.9 thsd tonnes, soybean oil – by 20% to 3-month high of 410 thsd tonnes, while palm oil – by only 5% to 850 thsd tonnes.

Imports of sunflower oil to India increased due to the active supply of oil from Russia, the price of which sellers willingly lowered, resulting in demand prices for CFR India fell to 1180 $/t.

Ukraine exported 1.5 mln tonnes of sunflower oil in MY 2024/25, including 371.5 thsd tonnes in September, 484 thsd tonnes in October and 481 thsd tonnes in November. During the 12 days of December, the export of oil decreased by 19% to 165 thsd tonnes compared to the same period in November.

Demand price of Ukrainian sunflower oil with delivery to the ports of the black sea fell to 1090-1100 $/t, and in Poland or Bulgaria – to 1150 $/t. However, importers from the EU, despite the sharp rise in prices for rapeseed and rapeseed oil in the EU, almost do not buy Ukrainian sunflower oil, as they have significant stocks.

According to Trading Economics, the average price of sunflower oil for delivery to buyers fell by 1.8% to 1275 $/t for the week (-3.5% for the month).

Prices for sunflower with an oil content of 50% with delivery to the plant this week fell by 200-300 UAH/t to 25000-25500 UAH/t amid falling oil prices, but processors are willing to pay a premium for large quantities.

Rise in prices for feed corn and wheat supported the price of sunflower meal, which rose in ports by 5-8 $/t to 195-200 $/t, which will improve the processing margin and will raise the price of sunflower.

January futures for soybean oil on the Chicago stock exchange yesterday fell 2.1% to 919 $/t (-2.6% for the week, -9.1% for the month) under pressure from forecasts of increased world soybean production.

According to the Malaysian palm oil Board, in December, palm oil production in the country will decline for the fourth consecutive month, as heavy rains delayed the harvest.

The reduction in production in Malaysia in the near future will stop the fall in palm oil prices, so the prices of sunflower oil will be pressured by the increase in the supply of cheap soybean oil from South America and the United States.

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