Speculative rise in oil prices supported vegetable oil quotes, but fundamental factors will continue to pressure prices

Rising soybean and soybean oil prices in Chicago, as well as a slight speculative rise in oil prices, have halted the decline in palm oil prices, but markets remain under pressure from increasing supply and falling demand.

December palm oil futures on the Bursa Malaysia exchange rose 1.6% to 4,205 ringgit/t or $1,010/t over the week, despite data on a decline in export growth in November and forecasts of an increase in palm oil inventories in Malaysia.

Prices are supported by a speculative increase in January Brent crude futures by 3.6% over the last 4 sessions to $65/barrel (0% for the week, +6.6% for the month), caused by a possible escalation between the US and Venezuela and new sanctions on Russian oil by the EU. However, fundamental factors indicate that oil prices should decline. Thus, OPEC revised its estimates of the world oil market for the third quarter from a deficit of -400 thousand barrels/day to a surplus of +500 thousand barrels/day, as US production exceeded expectations and OPEC members also significantly increased crude oil production in 2025. Sanctions on Russian oil have led to an increase in the discount on Russian Urals oil to $10-20/t relative to Brent, which will also put pressure on world oil prices.

December soybean oil futures on the Chicago Board of Trade rose another 2.2% to $1,150/tonne on the week (+2.2% on the month), supported by a 10% rise in soybean futures on the month. It is worth noting that the price of soybean oil in Brazil rose by $10-20/tonne to $1,100-1,110/tonne FOB, but remains significantly lower than in the US, while the price of soybean oil in China remains stable at $1,170/tonne Daylian.

Data on a sharp decline in vegetable oil supplies to India in October suggests that the major global importer is receiving enough offers to restrain purchases and reduce prices, especially given new soybean oil sales from China to India.

Prices for sunflower oil delivered to India decreased by $10-20/t to $1,300/t CIF Mumbai in a week, which continues to put pressure on prices for Russian sunflower oil, which fell by $10-20/t to $1,170-1,180/t FOB in a week (for delivery in November-December).

Demand prices for sunflower oil in Ukraine remained at $1,220–1,230/t during the week due to low supply with delivery to ports in November-December.

EU rapeseed oil prices remain at $1,270-1,280/t FOB Netherlands amid increased rapeseed supply and higher rapeseed harvest forecasts in the EU, Ukraine and Australia.

Weather in South America is conducive to sowing and development of soybean and sunflower crops, so markets remain in anticipation of increased supply and lower prices.