Vegetable oil prices remain at record lows amid falling demand and significant supply
A large harvest of soybeans, oilseed rape and palm oil and the beginning of sunflower harvesting have significantly increased the supply of vegetable oils on the world market, which allows importers to choose the cheapest offers. In addition, falling oil prices reduce demand for biodiesel, which also puts pressure on prices.
Soybean oil prices fell the most, which affected neighboring vegetable oil markets. On the Chicago Stock Exchange, December soybean oil futures for the month fell by 14.8% to the lowest level since the end of 2020 at $863/t, and on August 15 even fell to $848/t after USDA experts updated the forecast for the soybean harvest in the United States .
October palm oil futures on Bursa Malaysia fell 5.8% for the month to 3,715 ringgit/t, or $849/t, amid lower exports in August and a 5.6% drop in oil prices for the month.
According to surveyors Intertek Testing Services and AmSpec Agri, exports of palm oil products from Malaysia for August 1-20 decreased compared to the same period in July by 16.7-18.4%.
The average price of sunflower oil delivered to customers for the month fell by 0.4% to $901/t, Trading Economics reports. Demand prices for Ukrainian sunflower oil from buyers from the EU decreased by €15-25/t during the week to €860-880/t or $930-970/t DAP Poland, Bulgaria, the Netherlands against the background of an increase in the supply of European rapeseed oil and a sharp growth of the euro against the dollar.
According to forecasts of Russian analysts, in the 2023/24 financial year (which ends on August 31), the Russian Federation will increase sunflower oil exports by 27% compared to the previous season, from 4.1 to 5.2 million tons, while Ukraine exports more than 5.8 million tons .
In 2024/25, Ukraine will reduce production of sunflower oil, and the Russian Federation will increase both production and exports, but rising prices for sunflower oil will force importers to switch to purchasing other, cheaper vegetable oils.
