A sharp decline in palm oil prices increases pressure on soybean and sunflower oil prices

An explosive increase in palm oil prices in Malaysia in October predictably led to a decline in export supplies, an increase in stocks, and a pullback in prices, which in turn weighed down the prices of soybean and sunflower oils.

Palm oil futures on the Malaysian stock exchange hit a new record of 5,071 ringgit/t (. 1,222/t) last week, but fell 3.9% to 4,880 ringgit/t (. 1,175/t) on Friday amid negative export and inventory data for October.

According to Reuters experts, palm oil exports from Malaysia in October decreased by 11% compared to September - to 1.41 million tons, production decreased by only 0.98% to 1.69 million tons, which led to an increase in reserves by 3.4% to 1.81 million tons, due to increased prices for the product.

Malaysia in my 2020/21 reduced exports of palm oil to 15.86 million tons compared to 17.22 million tons in the previous season, including refined oil was reduced to 11 (13.5) million tons, and crude oil was increased to 4.8 (3.7) million tons.

December soybean oil futures on the Chicago Stock Exchange were actively declining last week amid increased forecasts for soybean production in the United States, lower imports to China, as well as under pressure from palm oil prices and lost 7.3% to.1,276/ton over the week.

According to Chinese customs statistics, soybean imports in October decreased to 5.11 million tons, which is 41.2% less than a year ago, and in general, 79.08 million tons of soybeans were imported in 10 months of 2021, which is 5% less than in the same period last year.

Prices for Ukrainian products sunflower oil last week, they decreased from F 1390-1420/ton FOB to F 1360-1380/ton FOB under the pressure of increased supply and lower demand.

Prices were supported by the purchase of 15 thousand tons of sunflower oil by the state agency of Egypt GASC last week for delivery in the period from December 25, 2021 to January 15, 2022 at a price of C 1,440/ton C&F.

In Ukraine, as of November 5, sunflower seeds were harvested on 95% of the area, or 6.2 million hectares, and 14.7 million tons were threshed with a yield of 2.38 t/ha. As of November 8, sunflower seeds were harvested in Russia on 96% of the area, or 9.3 million hectares, and 14.9 million tons were threshed with a yield of 1.6 t/ha. Sunflower production will reach projected volumes and markets continue to calm down, especially in anticipation of updating global balance sheet data from the USDA.