The rise in price of palm oil by 5.5% supported the prices of soybean and sunflower oil
Falling oil and fuel prices after reaching highs again, the resumption of palm oil exports from Indonesia and negotiations to reduce biofuel quotas in the EU have led to a sharp decline in world prices for vegetable oils over the past three weeks. In addition, the markets are under pressure from increasing forecasts of world production of soybeans and rapeseed, which are beginning to be harvested in Europe.
However, at the end of last week, against the background of increased demand and reduced supply of cheap oil, prices for vegetable oils turned up.
August palm oil futures on the Malaysian stock exchange Bursa yesterday rose 5.5% to 4922 ringgit / t or $ 1118 / t, after almost three weeks of falling back from the previous week, although they remain 18.8% cheaper than two weeks ago. During the month, palm oil fell by 21.9%, which was the biggest drop in prices since the crisis of 2008.
The reason for the recovery in prices was the shutdown of several plants in Malaysia due to rising purchase prices for raw materials and falling prices for palm oil. “Processors who have already fulfilled the contracts have stopped buying raw materials in anticipation of price stabilization. The break could last a day or a week, although there has been no such situation in the last 35 years, ”said Stephen Yeou, president of the Malaysia Palm Oil Producers Association.
According to surveyors, Malaysia from June 1 to 25 compared to the same period in May, exports of palm oil by 13-19.6%.
In South America, soybean oil prices fell after a record high in April amid forecasts of a nearly 30% drop in global economic recession to pre-war levels in Ukraine.
According to Platts from S&P Global Commodity Insights, prices for August supplies of soybean oil to FOB Up River (Argentina) and FOB Paranagua (Brazil) on June 23 fell to the lowest level since January 24 – $ 1391.34 / t, although at the beginning of the war and port blockades in Ukraine exceeded $ 1,900 / t.
Following palm oil prices, July soybean oil futures on the Chicago Stock Exchange rose 4.4% to $ 1,558 per ton in two sessions, losing 21.8% in two weeks.
Exports of sunflower oil from the ports of Ukraine are blocked, and even technically can not be resumed for several months. Oil supplies from Russia also declined due to high bid prices, high freight costs, and sanctions-induced payment difficulties.
Demand prices from European buyers for Ukrainian sunflower oil remain low at $ 1400-1550 / t DAP Poland, Romania, Bulgaria against the background of significant supply and lower prices for other vegetable oils.
Processors have reduced purchase prices for sunflower to levels at which producers refuse to sell it, especially given the sharp decline in yields in the new season.
Germany has proposed a temporary abolition of biofuel mandates, but G7 leaders are unlikely to support the move, especially the United States and Canada, which are trying to support domestic processing of corn, soybeans and canola into biofuels.
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