Prices for palm oil rose by 12% in two days

The Indonesian government's ban on palm oil exports has been a major concern for the market, and new government clarifications have risen sharply.

Indonesia, the world's largest producer of palm oil, is ready to extend a ban on exports of crude oil in the event of a shortage of derived products used in cooking oil. This was announced yesterday at an official meeting of the authorities with processors, although on Monday the government announced a ban on exports of only refined palm olein.

The market reacted to the first report on the export ban on Friday with a slight increase in prices by 0.6%, on Monday they even fell by 2%, but on Tuesday rose by 2.7% and on Wednesday by 9.1% to a record level 6987 ringgits / t or 1602.9 $ / t.

The reason for this jump was yesterday's government statement on the possible extension of the ban on exports of crude palm oil, RBD palm oil and waste oil from April 28 to reduce domestic prices for vegetable oils.

Traders were initially reluctant to respond to the government's decision, given Indonesia's limited infrastructure to store surplus oil, while global buyers intensified demand and demanded a resumption of supplies, and producers lost profits from export bans.

The brokerage company TA Securities said that Indonesia is very dependent on the export of palm oil, so its ban could hurt the economy, and therefore should not last long.

In response, Bangladesh will reduce tariffs on imports of rapeseed, sunflower and olive oil from 32% to 10% to maximize their supplies.

Imports of palm oil to India, the world's largest oil buyer, will exceed 600,000 tonnes in May, despite restrictions imposed by Indonesia, as most products were shipped before the ban took effect.

May soybean futures on the Chicago Stock Exchange rose 5.4% last week and rose another 5.5% on Monday to a record $ 1933 / ton amid restrictions on palm oil exports from Indonesia and a halt to supplies from Ukraine. due to the war. Soybean oil remains the most affordable on the market, so its prices rose by 21.6% over the month.

Rising prices for palm and soybean oil support the price of sunflower oil, but so far only Russia will benefit from this. In Ukraine, sunflower oil prices remain at 1400-1500 $ / t FCA due to logistical problems, but European importers are buying purchases due to supply problems.

We hope that the sharp rise in prices for palm and soybean oil will soon increase the demand for Ukrainian sunflower oil from the EU.