The vegetable oil markets immediately responded to the stock market collapse

2020-03-17 12:35:08
Machine translation
The vegetable oil markets immediately responded to the stock market collapse

prices of vegetable oils, which mostly depend on oil prices yesterday came under strong pressure drop in stock indices and oil prices caused by the pandemic virus Covid-19.

 

the Closure of the borders between countries reduces the demand for oil and the introduction of the quarantine and prohibition of work of establishments reduces demand for products.

 

Yesterday the price of Brent crude fell 14% to $30/barrel, per month decreased by half and reached its low 2016 level. It immediately reacted to the markets, palm and rapeseed oil, which is actively used in the production of biodiesel.

 

the price of rapeseed oil in the Netherlands demonstrated the largest one-day drop in the last 2 years, a decrease of 45 €/t to 670 €/t FOB DM, followed by the price of rapeseed on Euronext in Paris fell by 5% or 17 €/t to its lowest since April 2018 level 335,5 €/t or 375,05 $/t

 

May futures on palm oil in Malaysia yesterday, declined 2.9% to 2220 Ringgits/t or of 516.1 $/t, but they were supported by reduction in production forecasts.

 

soybean Futures in Chicago crossed the next support levels, down from Thursday is 4.8% to 304,4 $/t, while the may contracts for soybean oil was down by 6.2% to 562,4 $/t

 

the Market did not support the report of the National Association of oilseed processors (NOPA), according to which the processing of soybeans in the U.S. increased in comparison with February 2019 7.7% to 4.52 million tons, while stocks of soybean oil declined from 908 thousand tonnes in January to 872,5 thousand tonnes in February.

 

Prices for Ukrainian sunflower oil will remain under pressure from neighboring markets of vegetable oils. Customers reduce demand in anticipation of further decline of quotations, the bid price fell to 630-650 $/MT FOB, while prices remain high at 655-685 $/t FOB depending on the delivery terms.

 

as a Result of falling vegetable oil markets award for sunflower oil has increased to 100 $/t in comparison with soy, and up to 130 $/t compared to the palm. This suggests that prices for sunflower oil will start to drop, if quoted prices of palm and soybean oil will not recover anytime soon.

 

News about the cancellation of the quarantine of China, and enterprises, as well as the lack of coronavirus in India allows traders to hope for a recovery in demand for vegetable oils in the near future.

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