Palm oil quotes continue to rise in line with oil prices, but soybean and sunflower oil markets remain stable in anticipation of stronger demand

Oil prices are holding at a high level of $110/barrel, supporting global demand for biofuels, so palm oil prices are rising for the second week in a row, while soybean and sunflower oil prices remain under pressure from increased supply.

December palm oil futures on the Bursa Malaysia exchange rose 2.9% to 4,817 ringgit/t or $1,181/t over the past 7 days (+4.5% since the beginning of the month), supported by rising oil prices and forecasts of a reduced harvest in Indonesia.

One of the main drivers of growth was the expectations of market participants regarding the possible abolition of the export duty on crude palm oil by the Malaysian government. Experts believe that this could improve the competitiveness of Malaysian products in the international market, stimulate exports and contribute to the reduction of accumulated stocks. At the same time, an official decision on the abolition of the duty has not yet been announced, and its potential impact on prices will depend on actual demand from importers.

December soybean oil futures on the Chicago Board of Trade (CBOT) fell 1.9% to $1,470/t (-3.2% month-on-month, +30.8% year-on-year) amid an increase in the US soybean harvest forecast and a 2.8% weekly decline in soybean quotes. Additionally, prices are pressured by a 4.5% decline in US soybean processing volumes in September to 5.34 million tons, significantly below analysts' expectations.

At the same time, markets hardly reacted to the reduction in soybean oil stocks in the US by 12.4% compared to the end of August to the lowest level since November 2014 of 478 thousand tons (-15.3% compared to last year).

Spot prices for soybean oil in Brazil remained at $1,220-1,240/t FOB during the week, while soybean oil in Argentina is offered at $1,200-1,220/t FOB. At the same time, soybean oil futures in Dalian decreased by $15-20/t to $1,315-1,320/t.

Demand prices for sunflower oil in India increased by $10-20/t to $1,400-1,420/t CIF Mumbai in a week, while offer prices from the Black Sea region are $1,435-1,460/t CIF Mumbai. A sharp reduction in sunflower oil supplies to India in September by 36% to the lowest level since April 2022 of 103,000 t due to the blockade of the Black Sea ports of Ukraine and the Russian Federation supports prices. Currently, the Russian Federation offers sunflower oil with delivery FOB - St. Petersburg at a price of $1,330-1,350/t, which corresponds to the price with delivery to India at $1,450-1,480/t.

Argentina's share of world oil exports has increased from 7% in 2016/17 MY to over 10% in 2024/25 MY, and in 2026/27 MY it is forecasted to reach 13%. In the Indian market, the share of Argentine oil has increased from 8% to 12% in 2026. Argentine oil is offered at a price of $1,300-1,330/t FOB for delivery in November-December and $1,290-1,250/t FOB for delivery in February-April.

If the blockade of Russian exports continues, the share of Russian oil in the Indian market could decrease from 55 to 40-45%, and Argentina would become the second largest supplier.

In Ukraine, sunflower oil prices fell to $1,000-1,100/t FCA-plant during the week amid a further increase in the cost of road and rail logistics to EU ports and buyers. Demand prices for sunflower oil with delivery to the EU remain at $1,340-1,360/t, but an increase in domestic supply limits further price growth.

European rapeseed oil quotes increased by $5/t during the week to $1,390-1,395/t FOB Netherlands.

The Sunflower Oil Producers Association of India forecasts an increase in sunflower oil imports in 2026/27 MY by 30% to 3.5 million tonnes and a reduction in soybean oil imports by 10.7% to 5.0 million tonnes. Palm oil imports will remain stable at 8.0 million tonnes.

Therefore, Ukraine needs to increase container shipments of oil to India, thus solving the problem of blocking sea exports.