Seasonal increase in supply and decline in oil prices puts pressure on vegetable oil quotes

As we predicted last week, oil prices have started to fall after a long speculative rise, and the market has increased seasonal supply of vegetable oils, in particular palm, sunflower and rapeseed, and the supply of soybean oil is expected to increase, which increases the pressure on prices. The world supply of oilseeds in the 2026/27 MY will be a record, so buyers will expect prices to decline after speculative jumps, and only then will they start buying the necessary volumes.

 

November Brent crude futures fell 10% to $99/barrel (+10%) in the week on expectations of talks between Iran and other countries on the sidelines of the UN General Assembly.

 

December soybean oil futures on the Chicago SWOT fell 3.5% to $1,498/tonne during the week (+0.9% month-on-month), but are still 36% above last year's level. The start of the US soybean harvest is putting pressure on prices, but they are supported by hopes of successful negotiations between Trump and Xi.

 

During the week, spot prices for soybean oil in Brazil increased by $30/t to $1,240-1,250/t FOB, but soybean oil futures in Dalian (China) decreased by $30/t to $1,310-1,320/t against the background of the start of domestic harvest and increased purchases of soybeans from the USA and Argentina.

 

November palm oil futures on the Bursa Malaysia exchange have fallen by 1.5% to 4,810 ringgit/t or $1,180/t over the past 7 days, under pressure from falling oil prices and forecasts of a further increase in palm oil inventories due to a 12.8-24.7% decline in exports over the 20 days of September.

 

Sunflower oil demand prices in India fell by 3.6% to $1,380/t CIF Mumbai in a week under pressure from increased supply from the Black Sea region and a drop in prices in the Russian Federation by $50-60/t to $1,250-1,270/t FOB Black Sea ports due to an increase in the cost of freight and ship insurance.

 

In Ukraine, demand prices for sunflower oil decreased by $10/t to $1,090-1,100/t for delivery to Danube ports during the week due to increased shelling of ports and an increase in freight costs.

 

European rapeseed oil quotes fell by $10-15/t to $1,420-1,425/t FOB Netherlands during the week amid increasing supply of cheap rapeseed oil from Ukraine. In the 17 days of September, Ukraine exported 81.8 thousand tons of rapeseed oil and only 68 thousand tons of sunflower oil, as sunflower processing has only just begun.

 

Vegetable oil prices will stabilize in the coming weeks, with palm oil continuing to fall in price, which will put pressure on neighboring soybean and sunflower oil markets.