Palm oil continues to rise in price, which supports prices for soybean and sunflower oil

Despite the sharp decline in oil prices, palm oil continues to rise in price on forecasts of reduced production in Malaysia and Indonesia.

December futures for palm oil on the Bursa stock exchange in Malaysia last week rose by 7.6%, and on Monday (amid falling oil prices by 6%) fell by 1.6%, but over the next two sessions again rose by 3.7% to a 3-year high of 4695 ringgit/t or 1073 $/t (+8.9% for two weeks).

Prices support hopes for a recovery in demand from China after the government’s announced economic stimulus measures. Traders expect a reduction in exports due to rising prices, but believe that the increase in the premium for sunflower oil will force buyers to step up purchases of palm oil.

Indonesian authorities from November 1 raises the indicative price of crude palm oil from 893,64 to 961,97 $/t, so the export duty will be 124 $/t, which will increase the price of Indonesian oil on the world market.the December futures for soybean oil on the Chicago stock exchange yesterday rose 2.3% to 965 $/t (+0.9% for the week, +2% for the month), playing off the fall of Monday.

According to Trading Economics, during the week the average price of sunflower oil for delivery to buyers increased by 5% to 1289 $/t (+10% for the month).
the Premium for sunflower oil in comparison with soybean and palm oil is growing due to a sharp decline in supplies from Ukraine, caused by a shortage of supply of sunseed from producers and higher purchase prices for it.

At the same time, prices for soybean oil remain lower than for palm oil amid large stocks in China and increased imports of cheap soybeans to China. This restrains the growth of prices for sunflower and palm oil.

Prices are also under pressure from a reduction in vegetable oil imports to the EU. According to the European Commission, in MY 2024/25 (as of October 20), the EU reduced imports of oils compared to the same period of the previous season:

• soybean oil – by 65% to 80 thsd tons
• rapeseed oil – by 51% to 90 thsd tons
• sunflower oil – by 18% to 590 thsd tons,
• palm oil – by 17% to 980 thsd tons.

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