The spread between the vegetable oil price increases again

the spread between the vegetable oil price is rising again, despite the low demand from major importers and large volume of proposals from manufacturers. Although the low prices at Palmco oil high prices of soybean and sunflower oils reduce their competitiveness.

Transfer to the OPEC+ Monday to Thursday led to the decline in oil prices, followed by the beginning of cheaper palm oil.

Yesterday on the London exchange ICE the price of Brent crude fell by 7.2% to 32.4 $/barrel, but before the end of trading recovered to 34 $/barrel.

currently, OPEC+ are working to reduce oil production by 10 million barrels per day, representing 10% of global supply, although the world oil market, the supply exceeds the demand by 25 million barrels a day, so even the reduction of production will not return oil prices to the level that preceded the crisis.

the oil Market has supported the US stock market, where indexes Dow Jones, S&P 500 and Nasdaq rose 7.3-7.7 percent after optino trump statements about what the Covid -19 epidemic will peak this week and will continue to decline. Now in the U.S. are infected with more than 368 thousand people,half of whom Masaka in the state of new York, and the number of dead reached 9.6 thousand people.

June futures on palm oil in Malaysia fell yesterday by 4% to 2250 ringgit/t or 515,7 $/t after the oil prices and on expectations of increased production upon the resumption of palm plantations on the background of lower global demand.

Futures for soybean oil in the U.S. up 1.7% to 595,5 $/t with the support of the oil market and updated USDA data on soybean processing and reduction in supplies of soy oil in the United States.

Recovery of exports from Argentina increased supply of soybean oil on the world market, but prices remain at 588 $/ton FOB Up River for lack of demand from the major importer – India.

Egyptian GASC bought the tender for the domestic market, 12 tonnes of soybean oil at the price 648,8 $/t CFR, which is 17% lower than at the previous auction on February 13.

the bid Prices for Ukrainian sunflower oil grew to 670-680 $/t FOB for shipments in April-may, and for deliveries to India up to 730-740 $/t CIF, on the background of containment sales and manufacturers following the rise in price of soybean oil.

the increase in the spread between palm, soybean, and sunflower oil up to 80-85 $/t usually happens when buyers are willing to pay more for a better product. However, the decrease in incomes and demand as a result of quarantine will force buyers to economize, with the result that prices for sunflower oil will be lowered.

the price of oil at least another six months will remain low, which will reduce demand for biodiesel and will put pressure on palm oil price.