Reducing the price of palm oil increases the pressure on the prices of other vegetable oils

The palm oil market is under pressure from increased supplies from Indonesia, which is trying to get rid of the remnants accumulated during the export ban. During the week, quotations on palm oil fell by 10.5%, which increased the pressure on neighboring markets for soybean and sunflower oil.

After falling for a week, August futures for palm oil on the Malaysian stock exchange Bursa yesterday against the steps of Indonesian authorities to stimulate exports rose 0.9% to 5848 ringgit / t or $ 1322 / t, but lost a total of 10.5% for the week .

Indonesia, the world’s largest exporter of palm oil, has issued a permit to ship 1.16 million tons of palm oil products to speed up exports. Malaysia is also increasing exports. In May, it increased by 26.7% compared to April to 1.36 million tons, but in June may slow down against the background of stocks and the return of some buyers to Indonesia.

Malaysia’s palm oil inventories fell 7.4% to 1.52 million tonnes in May compared to April, although traders expected them to fall 9% to 1.49 million tonnes due to a 4-5% drop in production. However, production in May remained at the level of April – 1.46 million tons.

According to experts from the Solvent Extractors’ Association (SEA) of India, in May, India reduced imports of palm oil by 10% from 572.5 to 514.02 thousand tons compared to April, while increasing imports of soybean oil by 27% to 373 thousand tons, and sunflower – almost twice to 118.5 thousand tons.

Falling palm oil prices increase pressure on soybean oil, which is now the most competitive on the world market.

July soybean oil futures on the Chicago Stock Exchange fell 3.2% on Monday to $ 1,725 / t, losing 4.1% in a week.

The soybean market is under pressure from the acceleration of sowing in the United States, where as of June 12, soybeans sown 88% of the area, which corresponds to an average of 5 years. 70% of crops are in good or excellent condition, although 62% last year.

In Ukraine, soybean oil prices fell to 1150-1250 € / t FCA (depending on the region), but their further decline was halted by a sharp decline in meal and meal prices. Significant costs of shipment of meal force processors to accumulate it in warehouses in anticipation of unlocking ports, shipping only oil. As a result, soybean prices fell to 12-13 thousand UAH / t (410-450 $ / t).

Demand prices for Ukrainian sunflower oil are falling amid rising supply and delivery difficulties to Romanian and Bulgarian ports, with cars queuing at the border for 3-5 days and conventions being reintroduced at Romanian and Polish border crossings.