Oil World raises forecast for global vegetable oil production in FY2023/24, but prices continue to rise

Oil World experts increased the forecast of world production of 10 main types of oils in 2023/24 MR by 1.7% to 258.05 million tons, which will exceed the 253.78 million tons of the 2022/23 season, compared to previous estimates. The base oil export forecast remained at 97.58 million tons (99.65 million tons in FY 2022/23), and the consumption forecast was increased by 3.2% to 259.14 (251.07) million tons.

On the back of higher soybean oil prices and export volumes in March, May palm oil futures in Malaysia rose 1.7% yesterday to RM4,267/t or $904/t (+0.5% for the week), while on the exchange in Dalian, contracts for palm oil rose by 2.4%, and for soybean oil - by 1.22%.

According to surveyor Intertek Testing Services, in March, compared to February, Malaysia increased the export of palm oil products by 20.5% from 1.11 to 1.33 million tons.

May soybean oil futures on the Chicago Stock Exchange rose 1.33% in two sessions to $1,063/t (-1.5% for the week), although soybean prices fell another 2% for the week.

An increase in soybean acreage in the US and forecasts of an increase in sunflower production in the near future will have a negative impact on prices.

IGC experts predict that in 2024/25 the global production of sunflower will increase compared to the previous season by 600 thousand tons to 58.5 million tons, in particular in ES-27 - from 10.2 to 10.5 million tons. At the same time in the Russian Federation sunflower harvest will decrease by 200 thousand tons to 17.4 million tons, and in Ukraine - by 300 thousand tons to 16.2 million tons, although local agencies expect a significant increase in the area under oil crops and their production in 2024.