Vegetable oil prices rose slightly last week, but the collapse in oil prices will turn the markets around in the coming days.

High oil prices and increased demand for biofuels continued to push vegetable oil prices up last week, but after today's decision by the US and Israel to suspend hostilities against Iran for two weeks on condition that the Strait of Hormuz is unblocked, oil prices collapsed by 15-18%, so today we can expect a sharp decline in exchange prices for palm and soybean oil.

The biggest increase since the war has been in soybean oil prices in the US, which support promises to increase biofuel production in the country. But so far, the Trump administration has only imposed a 50% subsidy cap on imported oil used in the US for biofuel production, which has supported the quotations of domestic soybean oil.

The US Environmental Protection Agency (EPA) predicts that biodiesel production will increase sharply in 2026 and 2027 under the Renewable Fuel Volume Obligation (RVO) program, but quotas have not yet been agreed upon.

May soybean oil futures on the Chicago SWOT rose 1.3% to $1,535/t for the week, adding a record +39% since the beginning of 2026 and +55% for the year on expectations of increased demand for biodiesel. However, against the backdrop of falling oil prices, soybean oil is trading 3.5% lower today, and after the opening of trading, the decline will continue.

Thailand has tightened controls on crude palm oil exports for one year, effective April 7, 2026. Exports of the product now require prior government approval. The move is intended to balance domestic consumption and growing demand from the energy sector amid rising global oil prices caused by the conflict in the Middle East.

As stated by the Ministry of Commerce of Thailand, external demand for Thai palm oil has increased, but at the same time the need to increase the share of biodiesel in diesel fuel has increased.

But even this decision did not support palm oil prices, and yesterday May futures on the Bursa Malaysia exchange fell by 1.3% to 4,765 ringgit/t or $1,182/t (+6% in two weeks, +16% since the start of the war), and today they will continue to fall following oil prices.

Malaysia will release a report on production and inventories on April 10, and analysts expect that production in March could have overshadowed the increase in exports.

Prices for sunflower oil delivered to India remained at $1,430-1,435/t CIF Mumbai during the week, as the pace of oil imports is decreasing due to rising offer prices and increased supplies from Argentina.

Demand prices for Ukrainian sunflower oil increased by $5/t to $1,300-1,310/t for delivery to Black Sea ports in a week, having risen by only 2.5-3% since the start of the war in Iran. At the same time, the pace of sunflower oil exports from Ukraine increased in March.

The news of negotiations between the US and Iran will contribute to a decrease in oil and vegetable oil prices only if the Persian Gulf is unblocked, so the further fall in oil prices will be quite slow.