Slow palm oil exports continue to put pressure on soybean and sunflower oil prices

Traders expected that the reduction of palm oil stocks in Malaysia in December to a 19-month low will lead to an increase in quotations, but a sharp decline in exports in January increased pressure on prices.

According to the surveyors Intertek Testing Services and AmSpec Agri Malaysia, for January 1-15, Malaysia reduced exports of palm oil products by 15.5-23.7%.

India, the world’s largest importer of vegetable oils, in January may reduce imports of palm oil to a 5-year low amid negative refining margins, as buyers prefer cheaper soybean oil amid high prices for palm oil.

According to dealers, currently in India, crude palm oil (CPO) for delivery in January is offered at 1155 $/t CIF (including freight and insurance), while for deliveries in February and March, 1140 $/t and 1100 $/t are offered, respectively.

In the first half of January, imports of palm oil to India amounted to 110 thousand tons, and in total for the month it will reach 340-370 thousand tons, which will be the lowest since March 2022, when the supply of this oil decreased due to unofficial restrictions on imports from Malaysia. Recall that in January 2024, India imported 782.9 thsd tonnes of palm oil.

April futures for palm oil on the Bursa exchange in Malaysia fell by 4.5% to 4193 ringgit/t or $930/t (-4.2% for two weeks), despite the rise in oil prices by 5.6% for two weeks.

Reuters analysts believe that in case of further decline in demand, palm oil prices may fall to 3947-4045 ringgit/t.

March futures for soybean oil on the Chicago stock exchange on Friday rose 1.6% to 1007 $/t (0% for the week, +14% for two weeks) amid an unexpected sharp decline in the forecast soybean crop in the United States, but it did not support the price of palm oil.

According to Trading Economics, the average price of sunflower oil for delivery to buyers on Friday fell by 1.2% to 1291 $/t, but in General for two weeks increased by 2.8%.

Markets this week will be waiting for the orders of President trump, including on green energy, which can significantly affect the price of vegetable oils.

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