Egyptian GASC bought soybean and sunflower oil at a price of $50-$60/t lower than a month ago

The state-owned Egyptian operator GASC purchased 42,000 tonnes of vegetable oils (30,000 soybean and 12,000 sunflower) at an international tender yesterday, with delivery on February 5-25, 2023 and payment within 180 days.

A batch of 30,000 tons of soybean oil was purchased from the LDC company at a price of $1,415/t C&F, and 12,000 tons of sunflower oil was purchased from the Egyptian African company at a price of $1,330/t C&F, which is $60/t and $50/t accordingly cheaper than a month ago.

We will remind that at the November 21 tender, GASC purchased 30,750 tons of sunflower oil at a price of $1,380/t C&F and 35,000 tons of soybean oil at a price of $1,475/t C&F produced by the Russian Federation and Bulgaria with delivery in January, at the tender in early November – 6,000 tons of sunflower oil at a price of $1,474/t C&F with delivery in December, and 14,000 tons of soybean oil at a price of $1,600/t C&F at the end of October.

Soybean and sunflower oil prices continue to fall amid increased supply and low palm oil prices.

February palm oil futures on the Malaysian exchange are trading at 4,087 ringgit/t, or $925/t, after rising 7% this week. The market has supported the relaxation of China's entry rules, which could lead to increased demand from the main importer, but all eyes are now on the Chinese government's response to a sharp increase in cases and hospital overcrowding.

India, the world's second-largest importer of palm oil, has extended a low import duty on refined palm oil, which will help boost supplies of cheap palm oil rather than expensive soybean or sunflower oil.

The Ministry of Energy of Indonesia (the world's largest producer of palm oil) announced that the mandatory 35% blending of oil with biodiesel fuel will take effect on February 1, instead of January 1 as planned.

Against the background of low demand for sunflower oil in Ukraine, processors are offering UAH 16,000-17,000/t for sunflower with delivery to the factory, and the decrease in export prices of demand for domestic sunflower from European buyers allows processors to increase purchases.

Against the backdrop of the Christmas holidays, European buyers reduced demand for domestic sunflower, so prices fell to $520-535/t with delivery to Bulgaria, Romania and Hungary.

Rainfall in Argentina dampened speculative demand for soybeans and soybean oil on exchanges, so we expect quotes to decline in January under pressure from a record soybean harvest in Brazil and soybean offers from Argentina.