Falling oil and soybean oil prices have not yet affected palm and sunflower oil quotes

This week's 5.4% drop in crude oil prices and 5.3% drop in Chicago soybean oil prices have so far not affected palm and sunflower oil prices, which are supported by a pick-up in physical demand.

June Brent oil futures on London's ICE Futures exchange fell 4.7% to $83.8/barrel for the week, and July soybean oil futures on the Chicago Stock Exchange fell 5.2% to $952/barrel. t.

A report from the Malaysian Palm Oil Board was more upbeat than traders had expected, with June palm oil futures on Bursa Malaysia falling just 0.8% for the week to 3,844 ringgit/t, or $809/t, while the market had expected their sharp decline following oil prices.

In March, the production of crude palm oil in Malaysia increased by 10.57% compared to February to 1.39 million tons, and exports (in particular to India) - by 28.61% to 1.32 million tons, as a result of which stocks decreased by 10.68% to the 10-month low of 1.71 million tons.

The world's largest buyer of vegetable oils, India, in April increased palm oil imports compared to March by 41% to a 3-month high. At the same time, Malaysia in April reduced palm oil exports compared to March by 9-11.5% (according to surveyors Intertek Testing Services and Amspec Agri) as a result of reduced demand.

According to the Indonesian Palm Oil Association (GAPKI), in February 2024, palm oil exports from Indonesia decreased by 34% to 2.17 million tons compared to February 2023. This indicates that buyers prefer cheaper competitors - soybean and sunflower oil

According to Trading Economics, during the week the average price of sunflower oil with delivery to buyers fell by 13% to $857/t, in particular in Ukraine – by $5-10/t to $790-800/t for deliveries to Black Sea ports. At the same time, the demand for oil deliveries to Poland, Italy and the Baltic countries grew, for which buyers are ready to pay $870-900/ton.

Delays in soybean harvest in Argentina are disrupting soybean oil supply timelines, helping EU sunflower and canola oil sellers to sell their products.

According to Share UA Potential, Ukraine exported 628,000 tons of sunflower oil in April 2024, which is 15% higher than in April 2023 and corresponds to the level of the previous three months. In total, 4.4 million tons of sunflower oil were exported in 2023/24 MR, compared to 3.7 million tons for this period last year.

During the 2023 calendar year, Ukraine exported 5.7 million tons of sunflower oil worth $5 billion, while in 2022, 4.3 million tons of oil worth $5.5 billion were exported.