Prices for vegetable oil at the beginning of the new season are 10-15% higher than a year ago

According to the USDA forecast, in 2026/27 MY, global vegetable oil production will grow to a record 244.95 million tons (238.75 million tons in 2025/26 MY, 230.8 million tons in 2024/25 MY, and 222.4 million tons in 2023/24 MY), but ending stocks will remain at the previous season's level of 30.8 million tons due to increased consumption.

 

The cessation of oil exports from the Black Sea ports of Ukraine and the Russian Federation and the rise in oil prices keep vegetable oil prices high, although oil prices have increased by 34% over the year, and vegetable oil prices by only 10-15%.

 

October Brent crude futures have fallen 2.8% to $88.5/barrel over the past 7 days (+2.3% month-on-month), but are still 34% above last year's level, which continues to support high demand for biofuels and vegetable oil prices.

 

October palm oil futures on the Bursa Malaysia exchange have risen by 1.8% to 4,946 ringgit/t or $1,224/t over the past 7 days (+4.2% in two weeks, +15% in the year) amid active demand from importers, fueled by forecasts of a reduction in palm and soybean harvests in South America due to the impact of El Niño.

 

It should be noted that palm oil prices increased by 10% in local currency and 15% in dollars over the year, while soybean and sunflower oil prices increased significantly more over the year.

 

December soybean oil futures on the CBOT exchange in Chicago fell 2.6% to $1,493/tonne in the week (-2.5% in the month), but remain at a high level (compared to last year's price of $1,145/tonne) against the backdrop of high oil prices and a closed US biodiesel market.

 

During the week, spot prices for soybean oil in Brazil increased by $10/t to $1,210-1,220/t FOB, and soybean oil futures in Dalian (China) increased by $35-40/t to $1,300-1,311/t (+10% year-on-year), supported by the forecast of a decrease in the soybean harvest in China.

 

Sunflower oil demand prices in India fell by $20/t to $1,470/t CIF Mumbai during the week amid increased supply of new crop from the Black Sea region, but are still 15% above last year's level.

 

Demand prices for Russian sunflower oil for delivery in September decreased by $30/t to $1,330/t FOB in a week amid the start of sunflower harvesting in the south of the Russian Federation and in anticipation of increased supply, but also start the season at a level that is 15-16% higher than last year.

 

In Ukraine, demand prices for sunflower oil fell by $20-30/t to $1,300/t with delivery to Danube ports in a week, which is only 10-11% higher than last year's price level with delivery to Black Sea ports.

 

Against the background of increasing supply, quotations for European rapeseed oil decreased by another $30-40/t during the week to $1,390-1,400/t FOB Netherlands, which will continue to put pressure on rapeseed oil prices in Ukraine and sunflower oil in the EU.