The decrease in the forecast of production and stocks of vegetable oils has not yet affected quotations

In a November report, USDA experts lowered forecasts for production and stocks of vegetable oils, especially palm oil, but the markets reacted in the opposite way, and palm oil prices fell.

As in the October report, USDA experts lowered the palm oil export forecast for FY 2021/22 for Indonesia by 0.33 million t to 22.32 million t (26.84 million t in 2020/21 FY and 28.5 million t forecast for 2022/23 MY), but increased it for Malaysia by 0.227 million tons to 15.527 (15.87 and 16.5) million tons.

Compared with the October report, the following changes have been made to the new balance sheet for vegetable oils for 2022/23 MY:

• The forecast of world oil production was reduced by 0.91 million tons to 218.91 million tons (which will exceed the 211.24 million tons of the 2021/22 season by 3.6%), in particular palm oil – by 0.94 million tons to 72.22 ( 75.93) million tons due to the reduction of the harvest in Malaysia by 1 million tons.
• The estimate of world consumption was increased by 0.19 million tons to 213.8 million tons, which will exceed the figure of 206.35 million tons in 2021/22 MY by 3.6%.
• The forecast of global ending stocks was reduced by 0.4 million tons to 30.3 million tons (29.52 million tons in FY 2021/22), in particular for Malaysia – by 0.5 million tons.

On the report, January palm oil futures on Bursa Malaysia fell 3.9% to 4,198 ringgit/t, but recovered to end the week at 4,287 ringgit/t, or $924/t, 6.8% higher than previous month

The news that 9 Indonesian and 13 Chinese companies signed agreements for the supply of 2.5 million tons of palm oil worth $2.6 billion on November 11 as a result of intergovernmental agreements increased the pressure on prices. In 2021, Indonesia exported 6.6 million tons of palm oil to China.

According to the Malaysian Palm Oil Board (МРОВ), the country’s palm oil stocks rose for the fifth month in a row, reaching a three-year high of 2.4 million tonnes in October.

December soybean oil futures in Chicago rose 2% to $1,696/t on late-week data, up 17.8% from the previous month and matching the level at the end of April 2022, when Indonesia announced an export freeze.

However, the sharp rise in soybean oil prices did not support the sunflower oil market, whose quotations remain at the level of $1350-1435/t CIF.

Last week, the Egyptian GASC added 6,000 tons of sunflower oil at the tender to the Egyptian African Co. at a price of $1474/t C&F with delivery from December 20, 2022 to January 5, 2023 and payment within 180 days after the conclusion of the contract.