Vegetable oil prices remain stable and do not react to oil price jumps

World prices for vegetable oils have stabilized and stopped responding to speculative jumps in oil prices.

 

In the physical market, India continues to actively buy cheap palm oil, reducing demand for sunflower oil, while biodiesel producers receive raw materials under previously concluded contracts and are in no hurry to raise prices, expecting a drop in oil prices.

 

May palm oil futures on Bursa Malaysia started the week yesterday after a long weekend with a 1.6% drop to 4,537 ringgit/t or $1,147/t (-1% for the week), despite stronger exports and higher oil prices.

 

According to surveyors, palm oil exports from Malaysia in the first 20 days of March increased by 38-49% compared to the same period in February due to seasonal increases in production and higher temperatures, which allows for faster deliveries.

 

May Brent crude futures rose 5% yesterday to $105/barrel, but opened trading today down 5% on news of preparations for talks between the US and Iran.

 

May soybean oil futures on the Chicago SWOT, which have been growth drivers for the past 3 months, are trading at $1,450/t for the second week in a row (-0.3% per week, +8% per month) amid increasing soybean oil inventories in the US.

 

During the week, soybean oil prices in Brazil decreased by $10/t to $1,200-1,210/t FOB, in Argentina by $10-20/t to $1,140-1,160/t FOB, while on the Dalian exchange they remained at $1,250-1,260/t.

 

Argentina is completing its sunflower harvest, and Brazil is completing its soybean harvest, which increases supply on the world market, but given the rising cost of freight and insurance in the Middle East, Indian importers are increasing their purchases of South American oilseeds.

 

Prices for sunflower oil for delivery to India remained at $1,420-1,430/t CIF Mumbai during the week, as Argentina is actively offering sunflower oil at $1,260-1,280/t FOB, while Black Sea oil sellers are trying to increase their offer prices.

 

Offer prices for Russian sunflower oil increased by $10-15/t to $1,315-1,320/t FOB during the week, which led to an increase in demand prices for Ukrainian sunflower oil by $10/t to $1,290-1,300/t with delivery to Black Sea ports.

 

Oil prices are set to continue to fall on news of US-Iran talks. Traders are reporting reduced imports of palm, soybean and sunflower oil by Indian refiners, who are hopeful that the price hike caused by the war in Iran will not be long-lasting and that stocks of the oils can be replenished after the conflict ends. In addition, soybean and palm oil supply is set to continue to grow in April.