Argentina and Brazil continue to increase soybean oil supplies to India as it becomes cheaper than palm oil

According to Oil World, soybean oil exports from Argentina and Brazil rose to a record 0.95 million tonnes in July, mainly due to strong demand from India. Thus, compared to July 2025, Brazil increased exports from 138 to 318 thousand tonnes, while Argentina reduced them from 738 to 630 thousand tonnes.

India saw the largest increase in shipments, but exports to several African countries, Mexico, Peru and Colombia also grew moderately. India increased soybean oil imports by 31% in July compared to June to a 7-month high of 498.9 thousand tonnes, and imported 1.48 million tonnes in total, the highest since September 2025.

According to market participants' forecasts, based on data on import programs and ship schedules, India may increase soybean oil imports to 620,000 tons in August, with buyers already booking almost 1.4 million tons of soybean oil for delivery in September-December.

Since March, soybean oil from the US has become uncompetitive on the export market, leading to a sharp reduction in supplies to 9,000 tons in May, 9,000 tons in June, and 8,000 tons in July (compared to 29,000 tons in July 2025).

The competitiveness of Argentine and Brazilian soybean oil is increasing compared to palm oil in the forward physical market, as its prices are lower than those of refined palm olein.

According to the analytical company Platts, as of August 18, prices for Argentine soybean oil with shipment in September were $1,183.66/t FOB Up River, and for Brazilian soybean oil - $1,185/t FOB Paranaguá.

At the same time, the price of palm oil in Malaysia continues to rise, and over the past 7 days, October crude palm oil futures on the Bursa Malaysia exchange have increased by 5% to 4,961 ringgit/t or $1,220/t.

Currently, palm oil producers are reaping the benefits of the halt in sunflower oil exports from the Black Sea ports of the Russian Federation and Ukraine, but it is possible that a sharp drop in sunflower prices in these countries will increase the supply of cheap sunflower oil delivered by container via bypass sea routes at a price of around $1,200-1,250/t FCA container, which is equivalent to $1,320-1,360/t delivered to India. This will force palm oil producers to also lower prices in September and October, especially since the decline in palm oil exports began in August.