Sunflower oil is becoming more expensive after soybean oil against the background of a possible blocking of sea exports from Ukraine

Russia's threats to stop participating in the grain agreement and ban its effect after November 19 are supporting the prices of soybean and palm oil, the demand for which is growing against the background of restrictions on supplies of Black Sea sunflower oil.

January palm oil futures on the Malaysian exchange yesterday rose 4.7% to 4,175 ringgit/t, or $883.5/t, recovering from a fall late last week.

Indonesia plans to increase the indicative price of crude palm oil from $713.89/t to $770.88/t for the period November 1-15, which will lead to an increase in prices on the physical market.

December soybean oil futures on the Chicago Stock Exchange also rose 1.9% to $1,612/t yesterday, returning to mid-June prices amid strong demand for soybeans and soybean products in the United States.

According to NASS, as of Oct. 30, U.S. soybeans are 88% harvested, which is 10% above the 5-year average. Exports of soybeans from the USA for October 21-27 amounted to 2.574 million tons, and in general for the season reached 10.205 million tons, compared with 11.3 million tons on the same date last year.

The experts of the European Commission reduced the forecast of the sunflower crop in the EU by 0.2 million tons to 10 million tons (which will be 0.3 million tons less than the 2021/22 MR indicator). At the same time, the sunflower consumption forecast was increased by 0.2 million tons to 10.9 million tons (corresponding to the level of the previous season), and the import estimate was increased by 0.4 million tons to 1.2 million tons compared to 1.1 million tons in 2021 /22 MR.

Prices for sunflower oil on CIF terms - with delivery to buyers are increasing against the background of restrictions on oil supplies from Ukraine and the possible introduction of restrictions on the purchase of Russian agricultural products after Russia's withdrawal from the grain agreement and the lack of assistance from the UN.

According to the Trading economacs platform, during October, sunflower oil prices increased by 12.4% to $1,390/t CIF, which corresponds to the price level of early September and the pre-war price level of February 2022.

Prices of Ukrainian sunflower oil offers, against the backdrop of high freight and insurance rates, remain at the level of $1,100-1,150/t FOB - Black Sea ports, while Russian sunflower oil is offered at $1,200-1,250/t FOB.

The Reuters agency reports that the London-based insurance company Lloyd's Ascot is suspending the issuance of insurance policies for new deliveries through the grain corridor from Ukraine until the situation is clarified. At the end of July, Ascot and broker Marsh introduced a mechanism for grain traders that provided cargo insurance coverage of up to $50 million for each flight.