Palm and soybean oil prices fell by 4.4-5.9% amid a 14.5% drop in oil prices in two days

The U.S. stock market plunge continued on Friday, accelerating the decline in oil prices and putting pressure on vegetable oil prices.

Crude oil prices fell to a 4-year low after China imposed an additional 34% tariff on American goods in response to US actions, which could lead to a global crisis and a reduction in demand for energy.

June Brent crude futures fell by 14.5% to $65.5/barrel in two sessions (-6.9% per month), and US WTI crude fell by 15.2% to $61.7/barrel (-7.1%).

In commodity markets, quotes also fell slightly as traders watch what tariffs on American goods other countries will impose in response, which will allow them to assess the prospects for exports from the United States. So far, quotes for vegetable oils, which are correlated with oil prices, have fallen the most.

Despite a 14.5% drop in oil prices in two days, May soybean oil futures on the Chicago Board of Trade fell 4.8% in two sessions to $1,009/t (+6.2% month-on-month), but have not yet completely lost the previous week’s speculative 14.5% gain.

Traders hope that the fall in oil and stock prices will be short-lived, and President Trump will lift tariffs after negotiations with other countries, but experts say it will undermine confidence in the American state, politics, and economy, which in the long term will negatively affect global demand for goods and lead to a decline in commodity markets in the coming months.

On Friday, after China imposed additional tariffs, May soybean futures on the Chicago Board of Trade fell 3.7% to $359/t (-5.4% in two days, -4.9% in the month).

June CPO palm oil futures on the Bursa Malaysia exchange fell 4.4% in two sessions to 4,328 ringgit/t or $974/t (-2.1% for the week), failing to react to the sharp drop in oil prices.

It is worth noting that canola and rapeseed quotes also barely reacted to the drop in oil prices, so this week we expect further reaction of oilseed markets to the decline in prices for vegetable oils used for biodiesel production.

In Ukraine, sunflower oil prices remain at $1,125-1,135/t with delivery to Black Sea ports amid a supply shortage, but the decline in neighboring vegetable oil markets will very quickly lead to a drop in sunflower prices.