Rising inventories put pressure on vegetable oil prices

So far, the driver of global vegetable oil price growth has been soybean oil, which has risen 25% in 2.5 months on expectations of increased biofuel blending mandates in the US. But recent actions by the Trump administration have sent soybean oil prices plummeting, putting pressure on palm and sunflower oil prices.

July soybean oil futures in Chicago fell 5% to $1,099/tonne in a week (+4% in a month), and yesterday after the close of trading they fell another 3% to $1,065/tonne on data on increasing soybean oil inventories in the US and falling oil prices.

According to the US National Oilseed Processors Association (NOPA), soybean processing volumes in April increased by 14% compared to April 2024 to a record 5.5 million tons for this month, as a result of which soybean oil stocks reached a 10-month high of 950 thousand tons. Soybean oil exports from the US are decreasing as supplies from Argentina and Brazil increase.

According to OleoScope experts, soybean oil prices on the physical market have decreased and are $1,053/t FOB in Brazil, $1,218/t FOB in the EU, and $1,081/t FOB in China on the Daylian exchange for delivery in May.

In the EU, high rapeseed oil prices ($1,207/t FOB Netherlands) are supporting soybean oil prices, while sunflower oil demand prices have fallen to $1,120-1,150/t delivered to buyers.

In Ukraine, export prices for sunflower oil delivered to Black Sea ports decreased by $10/t to $1,110-1,115/t in a week due to increased offers, while prices for Russian sunflower oil remain at $1,120-1,125/t FOB and $1,200/t CIF Mumbai.

July palm oil futures on the Malaysian exchange fell 0.7% to 3,896 ringgit/t or $913/t over the week, pressured by weak exports in May.

According to surveyors, palm oil exports during May 1-25 increased by 1.6-5.3% compared to the corresponding period in April, but production is growing more actively, so stocks will increase again.

Hopes for increased demand for cheap palm oil from India have not materialized, as buyers expect increased offers from Argentina, which is increasing exports of soybean and sunflower oil from the new crop.

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