Vegetable oil prices began to rise amid the protracted war and high oil prices
The prolongation of the US-Israeli war against Iran and the blockade of the Strait of Hormuz are keeping oil prices high and increasing demand for biofuels, which continues to push vegetable oil prices up.
The nearest May Brent crude futures rose another 4.8% yesterday to $118.3/barrel (+66% since the start of the war), although June futures fell 3.3% to $104/barrel amid mutually exclusive statements from the parties regarding negotiations.
Amid rising oil prices and shortages of petroleum products, many countries have once again started talking about increasing the share of biofuels, which has led to a new surge in palm and soybean oil prices. Indonesia’s decision to introduce a B50 mandate has supported palm oil prices, and May futures on the Bursa Malaysia exchange have risen by 4.3% to 4,828 ringgit/t or $1,192/t since Monday (+6.4% for the week). In addition to high oil prices, they have been further supported by a 45-50% increase in exports in March compared to February.
May soybean oil futures on the Chicago SWOT increased by 4.5% to $1,515/t during the week (+12.8% since the start of the war).
During the week, soybean oil prices in Brazil increased by $20-30/t to $1,240-1,245/t FOB, while on the Dalian exchange they remained at $1,250-1,255/t.
Prices for sunflower oil for delivery to India increased by $5/t to $1,430-1,435/t CIF Mumbai during the week, as Argentina is actively offering sunflower oil at $1,260-1,280/t FOB, while Black Sea oil sellers are trying to increase offer prices.
Offer prices for Russian sunflower oil increased by $10/t to $1,325-1,340/t FOB during the week, and demand prices for Ukrainian sunflower oil increased by $5/t to $1,295-1,305/t with delivery to Black Sea ports.
The decline in the euro exchange rate against the dollar does not contribute to an increase in demand for sunflower oil in the EU, although the price in euros increased by 20-30 €/t to 1,140-1,160 €/t with delivery to European buyers.
News of US-Iran talks will continue to rock the markets, but following Iran’s attacks, neighboring Gulf countries such as Saudi Arabia, the UAE, and Bahrain have increased financial and political pressure on Iran, so we hope that the war will soon end with negotiations and a partial unblocking of the Gulf.
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