Yesterday's 2.4% drop in palm oil prices could lead to lower sunflower oil prices

July palm oil futures on the Bursa exchange in Malaysia fell 2.37% yesterday to 3,961 ringgit/t or $908.5/t amid falling oil and vegetable oil prices in China, where the Dalian exchange’s soybean oil contract fell 1.54% and the SPO1 palm oil contract fell 2.15%.

Malaysian palm oil exports continue to slow, even as production increases, leading analysts to expect inventories to rise by the end of April. According to surveyors, exports of the oil rose 13.8-14.8% between April 1 and 25 compared to the same period in March.

July Brent crude futures fell 1.1% yesterday to $64.9/barrel (-14.8% month-on-month) under pressure from the still-inconclusive talks between the US and China, which are holding back global economic growth and fuel demand.

July soybean oil futures in Chicago rose another 1.4% yesterday to the highest level since late 2023 at $1,112/t (+4.5% for the week, +11% for the month) on speculative expectations of increased processing in the new season. But the soybean oil market is heavily overbought, so a successful completion of planting or news about biodiesel production plans in the US could cause quotes to collapse sharply.

In Ukraine, export prices for sunflower oil delivered to Black Sea ports remain at $1,125-1,135/t amid limited supply. But demand is declining as oil from Argentina enters the market, with bid prices falling on forecasts of a record sunflower harvest.

Tags: palm oil, sunflower oil, prices