Soybean and palm oil quotes continue to fall as competition intensifies in the vegetable oil market

The fall in oil prices to the level of $73/barrel, which was before the war with Iran, stopped the speculative rise in soybean oil prices in Chicago and turned them downward, increasing pressure on adjacent vegetable oil markets.

July soybean oil futures on the CBOT exchange fell by 5.5% to $1,471/t in a week, and have already lost 18% of their value since the beginning of June on expectations of a decline in demand from the biofuel sector and an increase in forecasts of soybean and canola planting areas in the US and Canada.

The fall in soybean oil quotes in Chicago increased pressure on the Brazilian spot market, where soybean oil prices fell by $50-70/t to $1,150-1,170/t FOB during the week, although soybean oil futures in Dalian (China) for July delivery remained almost unchanged during the week and are trading at $1,225-1,230/t.

August palm oil futures on Bursa Malaysia fell 2.5% to 4,546 ringgit/t or $1,114/t during the week as exports slowed in recent days. According to surveyors, exports of palm products from Malaysia increased by 4.7-11.9% in June, although in the first 20 days of June exports were 25-30% higher than in May.

The sunflower oil market remains more tense due to seasonal supply reductions from the Black Sea region.

Demand prices for sunflower oil in India remained at $1,430-1,435/t CIF Mumbai during the week, but due to reduced supply at the end of the season, prices for Russian sunflower oil increased by $10-20/t to $1,310-1,320/t FOB.

In Ukraine, demand prices for sunflower oil delivered to Black Sea ports increased by $10/t to $1,335–1,340/t in a week due to a supply shortage caused by a small number of operating plants.

Rapeseed harvest in the EU and Ukraine increases the supply of rapeseed oil, but in the EU its quotes remain at $1,450/t FOB Netherlands, and prices for Ukrainian rapeseed oil have settled at $1,170-1,180/t with delivery to Black Sea ports or €1,100/t or $1,250/t with delivery to Poland.

Increased rapeseed oil supply will continue to put pressure on vegetable oil prices, but lower EU rapeseed and sunflower production forecasts due to the heat will limit price declines.