Reduced demand is driving down vegetable oil quotes

Uncertainty over the Trump administration’s policy to support biofuel production has sent soybean oil futures in Chicago down 5.4% for the week, adding to pressure on related oils. Meanwhile, the market is expecting palm oil to fall sharply on the back of rising inventories, declining exports and a sharp decline in oil prices.

According to a notice filed with the U.S. Court of Appeals for the District of Columbia on December 15, the U.S. Environmental Protection Agency (EPA) plans to issue final renewable fuel volume obligation (RVO) rules for 2026 and 2027 during the first quarter of 2026, although the market had expected this decision as early as Q3 2025.

Recall that the issue of renewable fuel volumes repeatedly throughout 2025 became a speculative reason for the rise and fall of soybean oil prices , which is the basis for biodiesel production in the United States.

Favorable weather for soybean planting in South America and low soybean sales from the US to China have caused soybean prices to fall by 8% in a month and are putting pressure on soybean oil prices.

December soybean oil futures on SWOT fell 5.4% to $1,086/t in the week, and are trading 6.4% lower than a month ago, amid uncertainty over biofuel production volumes and falling soybean prices.

The price of soybean oil in Brazil fell by $10-15/t to $1,095-1,100/t FOB in a week, while the price in China fell by $20/t to $1,165-1,170/t.

Prices for sunflower oil delivered to India decreased by $5/t to $1,320-1,325/t CIF Mumbai during the week under pressure from a drop in the price of Russian sunflower oil (delivered in December) by $10-15/t to $1,190-1,195/t FOB.

Demand prices for sunflower oil in Ukraine (with delivery to ports in December) decreased by $10/t to $1,220/t during the week against the backdrop of increasing supply and decreasing demand.

February Brent crude futures fell 2.5% yesterday to a 4.75-year low of $59/barrel, down 5% for the week and 8% for the month, putting heavy pressure on biofuel and feedstock prices.

January palm oil futures on Bursa Malaysia fell 3.6% to 3,962 ringgit/t or $970/t on the week under pressure from reduced exports, but will be further impacted this week by falling oil prices.

Surveyors estimated that Malaysian palm oil exports fell by 15.9-16.4% month-on-month between December 1 and 15, leading to further build-up in stocks in Malaysia. In addition, the strengthening ringgit against the dollar is keeping palm oil prices significantly higher than soybean oil, prompting importers to buy higher-quality soybean oil rather than palm oil.

Therefore, we expect a sharp decline in palm oil prices in response to the fall in oil prices, as well as a corresponding decline in quotations for related oils.

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