Palm oil prices fell amid changes in Indonesian export and quarantine rules in Shanghai

Yesterday, the Indonesian government replaced the ban on palm oil exports imposed on April 28 with a shipment acceleration scheme to ensure the export of at least 1 million tons of crude palm oil. Traders expected this, but quotations still fell by 3.5-4%.

To boost exports amid sharp stockpiles, Indonesia, the world’s largest exporter, is lowering its maximum rate of export duty and levies on crude palm oil from $ 575 / t to $ 488 / t.

August palm oil futures on the Malaysian stock exchange Bursa fell 4% or 259 ringgit / t to 6208 ringgit / t or $ 1413 / t yesterday, and on the Chicago stock exchange – by 3.4% to $ 1355 / t. The market is further pressured by a 5.5% drop in quotations on the Chinese Dalian Stock Exchange for palm oil and 2.6% for soybean prices, driven by the Chinese government’s decision to reintroduce quarantine in Shanghai through Covid-19.

At the same time, July soybean futures on the Chicago Stock Exchange fell only 0.4% yesterday to $ 1,819 / t, as they were supported by rising July soybean futures to a record $ 650 / t amid delays in soybean sowing in the United States.

On June 8, the Egyptian GASC held international and domestic tenders for the purchase of vegetable oils. However, due to the high prices of imported oils (for example, soybeans were offered for 1800-1910 $ / t), he bought only 52.5 thousand tons of local soybean oil at a price of 1770-1850 $ / t with payment in pounds and delivery on July 25 – 15 August 2022. Imported sunflower oil was offered for 1898-1988 $ / t C&F with payment upon delivery and for 1948-2028 $ / t C&F with a delay of 180 days, so GASC refused to buy it.

Demand prices for Ukrainian sunflower oil from European buyers remain at the level of 1500-1650 $ / t DAP Poland, Bulgaria, Slovakia. They are supported by growing demand from biodiesel plants, which are stepping up the purchase of technical soybean and sunflower oil amid shortages of rapeseed and rising fuel prices.