Palm and sunflower oil prices fall due to seasonal supply increases

As we predicted last week , palm oil prices have continued to decline, putting pressure on soybean and sunflower oil markets. Seasonal supply growth is accelerating, causing buyers to slow down their purchases.

India has reduced import duties , which will stimulate increased supplies and saturation of the domestic market, but at the same time will contribute to a further decrease in vegetable oil prices.

 

November palm oil futures on Bursa Malaysia fell 3% to 4,626 ringgit/t or $1,135/t (-7% month-on-month) over the past 7 days, under pressure from seasonal production increases and weak demand.

According to estimates by Intertek Testing Services and AmSpec Agri Malaysia, Malaysian palm oil exports fell by 15.1% to 24.3% from the previous month between September 1 and 25, putting stocks at risk of another record high at the end of September. Even rising oil prices have so far failed to support palm oil prices.

 

November Brent futures rose 4% to $103/barrel in a week (+13.8% in a month) amid a lack of progress in negotiations between Iran and the US and expectations of a further supply deficit from the Persian Gulf.

December soybean oil futures on the Chicago SWOT added 0.6% to $1,507/t for the week, but remain 3.8% below their level a month ago and under pressure from falling soybean quotes after hopes for increased sales to China failed to materialize.

 

Spot prices for soybean oil in Brazil remained at $1,240–1,250/t FOB during the week, and soybean oil futures in Dalian were around $1,310/t amid a seasonal increase in the supply of domestic harvest and imported soybean supplies.

 

Sunflower oil demand prices in India remain at $1,380-1,400/t CIF Mumbai due to delays in deliveries from the Black Sea region. At the same time, Russian sunflower oil prices lost another $40-50/t in the week to $1,220-1,230/t FOB under pressure from increased sunflower production and restrictions on exports through Black Sea ports.

 

In Ukraine, the demand prices for sunflower oil during the week remain at a low level of 1090–1100 $/t with delivery to the Danube ports due to increased shelling of port infrastructure and increased freight costs. Prices on the FCA plant basis decreased to 1050–1100 $/t due to the increase in the cost of automobile logistics to buyers in the EU.

 

European rapeseed oil quotes fell by $15-20/t to $1,400/t FOB Netherlands over the week amid increased rapeseed oil supply and increased competition from other vegetable oils.

In the 24 days of September, Ukraine exported 115,000 tons of rapeseed oil and only 100,000 tons of sunflower oil. At the same time, the pace of sunflower harvesting and processing is accelerating, so the supply of sunflower oil will increase in the coming weeks and increase pressure on prices due to limited shipment opportunities.

 

In the coming weeks, the vegetable oil market will remain under pressure from seasonal supply increases, falling sunflower oil prices, and further oil price dynamics.