Oil prices fell 2.5% on hopes for a diplomatic solution to Israel's conflict with the Gaza Strip

December Brent crude oil futures fell 2.5% to $89/barrel yesterday amid easing tensions in the Middle East. Because of a diplomatic mission to free hostages taken by Hamas, Israel has postponed an operation in the Gaza Strip, and Western countries are trying to stop the expansion of the war between Israel and Hamas. The UN called for a "humanitarian pause" in the war, which was supported by EU leaders.

December palm oil futures on the Malaysian exchange, after rising 6% last week, fell 1% yesterday to 3,733 ringgit/t or $779/t (-0.7% on the week) as oil prices strengthened pressure on quotations of other vegetable oils.

According to AmSpec Agri Malaysia and Intertek Testing Services, in the period October 1-20, compared to the same period in September, Malaysia increased the export of palm oil products by 7.9-9.9%, which supported palm oil prices.

December soybean oil futures in Chicago fell 2.7% to $1,143/t yesterday (-10.6% on the month) as soybean prices eased under pressure from strong US harvest rates and forecasts of more planted acreage soybeans in Brazil.

World demand prices for sunflower oil last week rose from $820 to $845/t with delivery to buyers, but in Ukraine, offer prices remain at the level of $650-670/t FCA - plant.

According to the forecast of APC-Inform, in 2023/24, Ukraine may reduce sunflower oil production by 8% to 5.5 million tons and export by 10% to 5.1 million tons compared to the previous season due to a decrease in deliveries through sea ports. In FY 2022/23, shipments by sea accounted for 76% of total sunflower oil exports.

In 2023, Ukraine will increase sunflower production, but the reduction of shipments of meal and oil through the Black Sea ports will limit the amount of processing. This will lead to an increase in sunflower exports and another drop in purchase prices for them in the near future.