Palm oil prices hit a 6-week high

Palm oil futures on the Malaysian stock exchange rose 5% on Thursday and Friday and rose 7.2% in two weeks to a six-week high on expectations of a pick-up in exports from Malaysia amid reduced supplies from Indonesia, and due to a decline in the Malaysian ringgit by 2.3% for the week.

So, April palm oil futures on Bursa rose 1.5% to 4,131 ringgit/t or $933/t on Friday, reaching 4,170 ringgit/t during trading, the highest level since 01/04/2023 .

According to the inspectors of Societe Generale de Surveillance and Intertek Testing Services, from February 1 to 15, Malaysia increased palm oil exports by 6.8-8.9% to 437-484 thousand tons compared to the same period in January.

The quote was supported by the rise in the price of soybean oil in Chicago and vegetable oil futures on the stock exchange in China. This gave optimism to exporters of sunflower oil, whose prices have fallen almost to the level of palm oil prices.

Soybean oil futures rose by 2.61% and palm oil futures by 3.49% on the Dalian exchange on Friday due to speculative demand amid further forecasts of a reduction in the soybean harvest in Argentina and a worsening of the global soybean balance in 2022/ 23 MR.

On the Chicago Stock Exchange, March soybean futures fell 0.6% to $1,355/t on Friday, but added 1.7% for the week and 4.2% for the two weeks.

In the February report, IGC experts reduced the forecast of world soybean production in 2022/23 FY by 6.2 million tons to 378 million tons (356 million tons in 2021/22 FY), in particular for the USA - by 1.9 million tons and Argentina - by 4.5 million t to 37.5 million t, although the USDA estimates it at 41 million t. Forecast of ending stocks of soybeans has been reduced from 53.8 to 49.2 million t (45 million t in FY 2021/22).

In Ukraine, sunflower oil prices are pressured by restrained demand from European buyers against the background of increased offers from local processors, which significantly reduced exports due to the blocking of ships from Black Sea ports.

According to the Trading Economics platform, prices for sunflower oil delivered to customers fell to $1,085/t CIF amid weaker demand in China.

Rising palm and soybean oil prices will boost demand for Ukrainian sunflower oil, especially with talks on extending the grain corridor this week.