Vegetable oil prices remain under pressure from increased supply of soybean oil

Over the past week, vegetable oil prices recovered from a fall, although they remain under pressure from the seasonal increase in soybean and palm oil supply, as well as falling oil prices.

Despite the 3.2% decline in oil prices over the week, soybean oil prices in Chicago and palm oil prices in Malaysia rose by 2.2-3.2%, recovering from the drop at the end of last week.

the July futures for soybean oil in Chicago this week rose 3.2% to 980 $/t (-9% for the month) on the news of the loss of 1-2 million tons of soybeans in Brazil.

the June futures for palm oil in Malaysia on Monday rose 2.2% to 3930 ringgit/t or 830 $/t on forecasts of adverse weather in Indonesia.

Meteorological Agency of Indonesia has warned that from 7 to 13 may in the country may be thunderstorms and tornadoes, which can lead to landslides and floods. From May to August, 64% of the country will experience a dry season, which will negatively affect the yield of palm trees.

On the stock exchange in Dalian, the most active contract for soybean oil yesterday rose by 1.51%, and for palm oil – by 2.22%.

the world’s Main buyer of vegetable oils – India in April increased in comparison with March, the import of edible oils by 13% to 1.3 million tons, in particular palm oil – by 41% to 3-month high 682 thousand tons, and soybean oil – by 79% to 10-month high 391 thousand tons, while imports of sunflower oil decreased by 48% to 233 thousand tons. the Increase in purchases due to lower prices for crude palm oil (CPO) for the month by 50 $/t to 920 $/t CIF (for delivery to India in June), while soybean on the same terms offer 920 $/t, and sunflower – at 945 $/t.

According to Trading Economics, during the week the average price of sunflower oil for delivery to buyers fell by 0.7% to 851 $/t, in particular in Ukraine – by 5-10 $/t to 780-790 $/t with delivery to the Black Sea ports.

Export prices for Russian sunflower oil increased by 5-10 $/t to 815-825 $/t FOB Black sea ports, which slightly reduced demand from India and China. In Russia, the indicative price of sunflower oil, which is used to calculate the export duty (0% rate this season), is 766.7 $/t, which confirms the willingness of exporters to sell oil at this price.

Tags: Ukraine, Russia, China, sunflower oil, soybean oil, prices, India, edible oils