Falling vegetable oil markets lower prices for oilseeds in Ukraine

2021-06-15 12:06:23
Machine translation
Falling vegetable oil markets lower prices for oilseeds in Ukraine

Reduced demand for vegetable oils and a possible reduction in the use of soybean oil for biodiesel in the United States yesterday brought down stock prices and increased pressure on the rapeseed, soybean and sunflower markets.

 

On the Malaysian stock exchange yesterday, August palm oil futures fell 8.5% to their lowest level since February of 3,375 ringgit/ton, or 8 820/ton, on forecasts for increased production and inventories due to reduced exports. The total monthly drop was 22%.

 

On the Chicago SWOT, July soybean oil futures fell 2% to 1 1,448.6/ton, and December – immediately by 3.5% to. 1,355/ton, losing 9.5% and 8% over the week, respectively. The reason was rumors about the government's intentions to cancel the requirement for the mandatory use of biofuels in the production of automobile fuel, which may reduce the demand for soybean oil.

 

In Ukraine, export prices for sunflower oil of the old crop decreased to 1 1250-1280/ton FOB for deliveries in July – August, and for the new crop – to 1 1150-1180/ton FOB. But low demand leads to uncertainty with the purchase prices for sunflower, which still remain at the level of 18000-19000 UAH/ton with delivery to the plant. Some processors that have sold oil profitably allow themselves to buy sunflower seeds at 19500-20000 UAH/ton.

 

At the same time, against the background of active demand from processors, purchase prices for soybeans with GMOs for the week fell by 300-500 UAH/ton to 18400-18700 UAH/ton with delivery to the plant. Export prices for non-GMO soybeans decreased from a record $750-760/ton to 7 700-710/ton with delivery to the border.

 

Forward prices for rapeseed of the new crop delivered in July – August to the port or border after reaching a record $650-665/Ton also fell to 6 610-630/ton under pressure from falling canola prices due to improved weather in Canada.

 

Uncertainty about demand from the biofuel industry and the US intention to accelerate the transition to electric transport and reduce funding for biofuel production will increase volatility in oilseed markets in the near future.

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