Palm oil prices continue to fall, increasing pressure on neighboring soybean and sunflower oil markets

As previously predicted, the drop in oil prices has collapsed palm oil prices and increased pressure on neighboring soybean and sunflower oil markets.

January Brent crude futures fell another 12.6% to $92/barrel over the past 7 days, losing 18.5% in two weeks, sharply increasing pressure on vegetable oil prices.

January palm oil futures on the Bursa Malaysia exchange have fallen by 6.8% to 4,260 ringgit/t or $1,050/t over the past 7 days (-10.4% in two weeks) under pressure from falling oil prices and further growth in inventories in Malaysia.

According to MPOB, Malaysia's palm oil production in October rose by 1.74% to 2.154 million tonnes, while exports rose by 55.75% to 1.709 million tonnes, but inventories still rose by 3.15% to a record 3.621 million tonnes, which will continue to put pressure on prices, especially if exports slow.

December soybean oil futures on the SWOT exchange in Chicago fell by 4% to $1,405/t during the week (-6.4% in two weeks) following a decline in oil and palm oil prices, but rising soybean quotes may keep them from falling further.

During the week, January soybean oil futures in Dalian (China) fell by $25-30/t to $1,305-1,310/t under pressure from increased supply from the local new crop.

Offer prices of Russian sunflower oil with delivery FOB - St. Petersburg remained at $1275-1280/t during the week, demand prices with delivery to China - at $1300/t, and with delivery to the countries of the Eastern Mediterranean - at $1400/t. Offer prices of sunflower oil from Kazakhstan decreased to $1120-1150/t on the border with China, while demand prices fell to $1100/t.

In Ukraine, several oil extraction plants have been attacked in recent days, which has reduced the number of processing enterprises and increased pressure on sunflower prices. Accordingly, sunflower oil prices have also decreased to $900-950/t FCA - plant or $1290-1300/t with delivery to terminals on the western border.

The increase in the supply of sunflower oil from the Russian Federation and Bulgaria will continue to increase pressure on sunflower and oil prices in Ukraine in the near future.