Global edible oil prices decline amid falling crude oil prices and rising stocks

The global edible oil market is under pressure from declining crude oil prices, rising palm oil inventories and increasing supplies of vegetable oils. Over the past week, January Brent crude oil futures fell by 12.6% to $92 per barrel, losing 18.5% over two weeks. This intensified downward pressure on palm and soybean oil markets and added to bearish sentiment in sunflower oil prices.

The sharpest decline was recorded in the palm oil market. January futures on Bursa Malaysia fell by 6.8% over the week to 4,260 ringgit, or approximately $1,050 per ton, bringing their two-week decline to 10.4%. An additional bearish factor was the increase in Malaysian palm oil inventories to a record 3.621 mln tons in October, up 3.15% from September. Palm oil production increased by 1.74% to 2.154 mln tons, while exports rose by 55.75% to 1.709 mln tons. Despite stronger overseas shipments, elevated inventories continue to weigh on the market.

Soybean oil prices are also falling alongside palm oil and crude oil. December soybean oil futures on the Chicago Board of Trade (CBOT) declined by 4% over the week to $1,405 per ton, bringing their two-week losses to 6.4%. However, strengthening soybean prices could limit further declines in soybean oil quotations. On China’s Dalian exchange, January soybean oil futures fell by $25–30 per ton over the week to $1,305–1,310 per ton, pressured by increased domestic supplies from the new harvest.

Price movements in the sunflower oil market remain mixed. Russian sunflower oil was offered at $1,275–1,280 per ton FOB St. Petersburg during the week, while bid prices for deliveries to China stood at around $1,300 per ton and those for Eastern Mediterranean destinations reached $1,400 per ton. Meanwhile, Kazakh sunflower oil offer prices declined to $1,120–1,150 per ton at the Chinese border, while buyers reduced their bids to $1,100 per ton. Increasing supplies from Russia and Bulgaria are also intensifying competition in regional markets.

In Ukraine, sunflower oil prices declined to $900–950 per ton FCA plant, while deliveries to terminals at the western border were quoted at $1,290–1,300 per ton. Russian attacks on oilseed crushing plants are creating additional uncertainty in the domestic market, reducing processing capacity and affecting demand for sunflower seed. In the near term, global edible oil price movements will depend on crude oil market trends, the pace of Malaysian palm oil exports and competition among major suppliers of soybean and sunflower oil.

Tags: sunflower oil, soybean oil, palm oil, edible oils, global market