Palm and soybean oil prices fell 4.4% and 6% for the week amid speculative selling

Global vegetable oil markets remain under pressure from forecasts of lower oil prices, increased supply of palm oil from Indonesia and falling demand for it. On the stock exchanges of the USA and Malaysia, traders on Friday actively sold contracts in anticipation of a decrease in world prices due to the recession of the world economy.

Oil prices rose slightly last week, but vegetable oil markets were largely unaffected by uncertainty over future trends.

August palm oil futures on Malaysia's Bursa exchange remained flat all week, falling 4.4% to 4,708 ringgit/t, or $1,068/t, on Friday, nearly reversing the previous week's decline in three sessions, but 18 .8% inferior to the level of two weeks ago. Over the month, palm oil prices fell by 21.9%, which was the biggest drop since the 2008 crisis.

According to surveyors, in June, compared to May, Malaysia reduced palm oil exports by 10-13.4%, although analysts expected a larger reduction. The market is now awaiting the production report for June.

The market was supported by information about Indonesia's intention to increase the production of biodiesel from palm oil from 30% to 35%, in order to increase purchases of palm from farmers after the slowdown in exports.

On Friday, palm oil futures fell by 6.5% and soy futures fell by 5.1% on the Dalian Stock Exchange.

On the Chicago Stock Exchange, July soybean futures fell 10.6% to $1,450/t in two sessions amid expiring contracts, while October futures fell 7.8% to $1,378/t, even as a cut was forecast soybean acreage in the United States.

Pressured by weak demand from importers, soybean oil prices for August delivery fell to $1,448/t FOB Paranagua in Brazil and $1,439.6/t FOB Up River in Argentina.

A significant supply of soybean and palm oil compensates for the shortage of sunflower oil on the world market. Russia extended the export duty on sunflower oil and meal and transferred payments for them to rubles, which will support prices at a high level. Since July 1, the rate of export duty on sunflower oil has increased to $560.1/t (in June it was $525/t) due to an increase in the indicative price from $1,750/t to $1,800.2/t.

According to the Ukroliyaprom association, 500,000 tons of sunflower oil remain ready for export in the ports and factories of Ukraine, and another 200,000-250,000 tons of oil are produced every month. However, in June, only 82,000 tons of oil and 52,000 tons of meal were exported by railway. Previously, oil was exported mainly to India and China, so only the unblocking of the ports will allow the restoration of supplies in that direction. If before the war, China bought up to 50% of Ukrainian meal, now factories are forced to burn it due to low prices and demand, receiving electricity instead.

Demand prices from European buyers for Ukrainian sunflower oil fell to $1,350-1,450/t DAP Poland, Romania and Bulgaria amid significant supply and falling prices for other vegetable oils.

The Indian government has issued quotas for duty-free imports of soybean and sunflower oil until June 30, 2023, to contain domestic prices, although the duty was earlier reduced to 0%, boosting soybean oil supplies.