Egypt's GASC bought soybean oil more expensive, despite record harvest and availability of sunflower oil

Egypt's GASC bought sunflower oil in the tender at $24 per ton cheaper and soybean oil at $23 per ton more expensive than in the previous tender.

In the global market of vegetable oils, there remains a surprising situation where, despite the record soybean harvest in the world, prices for soybean oil are higher than for the usual premium sunflower oil, even taking into account the fact that the sunflower harvest in Ukraine has decreased and will also be lower in the new season for average values.

On June 13, the State Agency of Egypt GASC held an international tender for the purchase of vegetable oil with delivery from July 20 to August 5, 2023, as well as a tender for the purchase of vegetable oil in the domestic market.

The purchase of soybean and sunflower oil was planned with immediate payment. The purchase is financed by the International Islamic Trade and Finance Corporation (ITFC).

The previous international tender for the purchase of oil, scheduled for June 6, was canceled for unknown reasons.

The international tender received 3 offers for the supply of sunflower oil at the prices of 926, 994 and 1000.5 dollars per ton with immediate payment and 7 offers for the supply of soybean oil at the prices of 1075-1119 dollars per ton with immediate payment. It is worth noting that the prices of offers for soybean oil were almost at the same level as in the tender on May 11, while the prices of offers for sunflower oil decreased by 60-75 dollars per ton compared to the previous tender.

As a result of the June 13 auction, the Egyptian GASC purchased 18,000 tons of vegetable oil for delivery from July 20 to August 5, 2023, including:

- 12,000 tons of soybean oil from Green Suppliers and Aston Agro at a price of $1,048 per ton C&F with immediate payment, which was $23 per ton higher than the May 11, 2023 tender and $277 per ton lower than at auctions at the end of February;

- 6,000 tons of sunflower oil from TOI Commodities with immediate payment at a price of $926 per ton C&F, which is $24 per ton lower than the May 11 tender and $94 per ton lower than the April 19 tender and $314 per ton is lower than at the end of February.

It remains unclear why GASC purchased the more expensive soybean oil when there were still offers for cheaper and higher quality sunflower oil.

According to the latest figures from the Egyptian industry, palm oil imports to Egypt are expected to fall to 1 million tonnes in 2023, down 10% from 2022, which is also a bit surprising given the decline in imports of cheaper palm oil.