During the week, palm oil prices fell by 8.3%, and soybean prices by 7.8%.

Global vegetable oil markets remain under pressure from forecasts of a record soybean harvest in South America, reduced demand and soybean processing volumes in the US, and the approval of year-round sales of gasoline with a high ethanol content.

 

February palm oil futures on the Bursa exchange in Malaysia fell 4.3% yesterday to 4,529 ringgit/t or $1,014/t (-8.3% since the beginning of the week, -13.3% in two weeks) on the back of falling demand, failing to respond to the increase in the export base price in Malaysia and the introduction of the B40 standard from January 1 in Indonesia.

 

Indonesia's intentions to increase the share of palm oil in biofuels from 35% to 40% from January 1, 2025 significantly supported quotes, but a reduction in palm oil exports from the country in November by 11.2% to 2 million tons negatively affected prices.

 

Malaysia left the export duty on crude palm oil at 10% for January, but increased the base price from which the duty is calculated from 4,471.39 to 5,001.72 ringgit/t ($1,120.96/t).

 

January soybean oil futures on the Chicago Board of Trade fell 7.8% this week to $870/t (-5% in two weeks) amid an 11% decline in US soybean processing in November and improved soybean crop prospects in South America.

 

The U.S. government funding bill released Tuesday includes a plan to allow year-round sales of gasoline with a higher ethanol content (E15), a victory for corn and ethanol lobbyists. Traders say the increased blending of corn-based ethanol could reduce demand for soybean oil, which is used to make biodiesel.

 

On the Dalian exchange, the most active soybean oil contract fell by 3.75% to its lowest level since September - 7,590 yuan or $1,041.74/t amid increased soybean supplies and reduced demand within China.

 

The decrease in demand for vegetable oils from the EU is increasing pressure on prices in Ukraine.

 

According to the European Commission, in the 2024/25 MY (as of December 15), EU countries increased oilseed imports by 12% to 22.1 million tons compared to the corresponding period of the previous season, but reduced vegetable oil imports by 19%, in particular soybean - by 64% to 111 thousand tons, rapeseed - by 52% to 114 thousand tons, sunflower - by 16% to 927 thousand tons, and the most actively imported palm oil - by 16% to 1.422 million tons.

 

According to Trading Economics, the average price of sunflower oil delivered to customers fell by 1.8% to $1,257/t since Monday (-4.2% in two weeks).

 

Forecasts of increased soybean supplies in 2025 continue to put significant pressure on global prices for edible oils.