The rise in the price of palm oil by another 2% supports the price of sunflower oil

In the vegetable oil markets, prices for soybean and palm oil continue to rise, while prices for sunflower oil, despite its high quality, have stabilized at F 1,400/ton FOB.

On Monday, April palm oil futures on the Malaysian stock exchange rose immediately by 1.7% to a record 5,667 ringgit/ton or.1,353/ton on news that the Indian authorities lowered duties on imports of crude palm oil to reduce inflation in the country.

After an 18.7% reduction in palm oil exports from Malaysia in January due to falling demand from India, the market has now received a strong support signal. On Monday, the Indian authorities lowered the tax on palm oil imports from 7.5% to 5% as part of the fight against domestic food inflation.

However, analysts believe that in Q1 2022, India will continue to reduce imports of palm oil, and soybean oil will rise sharply against the background of record prices for palm oil.

March soybean oil futures on the Chicago Stock Exchange have been trading at 1 1,445/ton for the past two sessions, the highest of this season. Against the background of forecasts of a decrease in the soybean crop in South America, India may prefer cheaper sunflower oil.

Prices for Black Sea sunflower oil remain in the range of F 1385-1400/ton FOB, and there is almost no premium for quality compared to soybean or palm oil. Importers are afraid to buy sunflower oil amid political tensions between the main exporting countries, as in the event of military operations in the region, supplies will be disrupted. 

However, against the background of a further decrease in the soybean crop in South America, prices for sunflower oil may rise to 1 1450-1470/ton FOB. Until the end of the season, prices for vegetable oils will remain at the level of 1 1,350 -1 1,500/ton and are unlikely to decline in the second quarter, as previously predicted by experts.