Rising oil prices and lower import duties by India support vegetable oil prices
In a new report, USDA experts lowered their forecast for global vegetable oil production in 2021/22 MG by 0.5 million tons to 215.36 million tons, which is still 8.3 million tons higher than the previous season's harvest. In particular, the forecast for rapeseed oil production was reduced by 0.4 million tons, and soybean oil – by 0.1 million tons.
The estimate of global consumption of vegetable oils was reduced by 0.15 million tons to 212.72 million tons, which is 6.05 million tons higher than in 2020/21 MG.
It is expected that due to a decrease in imports, the final reserves of vegetable oils will grow by 0.7 million tons to 22.7 million tons (22.76 million tons in 2020/21 MG), which will be the lowest level since 2010/11 MG.
On the eve of the report's release, October palm oil futures on the Malaysian stock exchange fell 4.7% in two sessions, but yesterday recovered 0.9% to 4,318 ringgits/ton or.1,028/ton following rising oil prices amid too slow recovery in production in the US Strait of Mexico and a new hurricane approaching the coast.
Quotes were also supported by the decision of the Government of India to reduce the duty on imports of palm, soybean and sunflower oil from September 11, in particular:
- for raw butter – from 10% to 2.5%, and the total amount of import tax will be 24.75%,
- for refined palm, soybean and sunflower oil – from 37.5% to 32.5%, and the total amount of import tax will be 35.75%.
The decision taken by the Brazilian government to reduce the content of biodiesel in fuel from 13% to 10% to curb the growth of diesel fuel prices will soon increase pressure on the prices of soybean oil, which is used for the production of biodiesel.
December soybean oil futures on the Chicago Stock Exchange for the month fell by 12% and are trading at 1 1,239/ton.
Prices for Ukrainian sunflower oil remain at F 1,260-т 1,300/ton FOB amid a delay in sunflower harvesting and a possible decrease in the sunflower crop in Russia.