Palm oil rose in price by 4% due to the blocking of sunflower oil supplies from Ukraine
Palm oil futures rose more than 4% yesterday, the biggest daily gain since December, after last week’s 6.9% drop. The reason was forecasts of a reduction in supplies of sunflower oil from Ukraine and soybean oil from Argentina.
July palm oil futures on Bursa Malaysia rose 4.1% to 3,787 ringgit/t, or $855/t yesterday, but remained 4.7% cheaper than two weeks ago.
Prices support traders’ fears of the closure of the Black Sea Grain Corridor after May 18, which will reduce sunflower oil supplies to India and boost palm oil imports.
On the Chinese stock exchange in Dalian, soybean oil futures rose by 2.1% and palm oil futures by 3.4% yesterday.
On the exchange in Chicago, soybean oil futures yesterday rose by 1.4% to $1,210/t, which is 0.9% higher than the previous week’s level.
Crude palm oil prices fell 42% to $1,030/t, soybean oil fell 45% to $1,040/t, and sunflower oil fell 53% to $1,010/t, prompting India to sharply increase oil imports. As a result, domestic prices for oilseeds fell significantly, so farmers and producers of edible oil appealed to the authorities to protect the domestic market and increase the duty on oil imports.
In the current season, an unusual situation has developed on the Indian market, when the premium for high-quality sunflower and soybean oil in comparison with palm oil has disappeared.
The Solvent Producers Association of India (SEA) reports that from November to March 2023, the country increased its import of edible oils by 23.7% to 6.98 million tons compared to the same period of the previous season.
According to the Soybean Processors Association of India (SOPA), from September to March 2022/23 MY, prices of imported crude soybean oil fell by 31%, and prices of palm oil and sunflower oil also fell accordingly.
India imports nearly 56% of its annual edible oil consumption of 24-25 million tonnes, with about 8 million tonnes of palm oil coming from Indonesia and Malaysia.
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