Soybean oil prices continue to rise, but sunflower oil prices have declined slightly

Traditionally, oilseed markets await the results of the oilseed harvest in South America in late February and early March. For two consecutive years, March has started with a decline in vegetable oil and oilseed prices amid strong harvests in Brazil.

 

This year, the situation is likely to repeat itself, as Brazil's soybean harvest is set to be record-breaking, and oil prices have now risen to a 6-month high (due to speculation in anticipation of a war in Iran), keeping soybean oil prices in Chicago at their highest levels since mid-2023.

 

March soybean oil futures on the Chicago SWOT exchange rose another 4.7% during the week to $1,322/t (+11% month-on-month) and are trading 30% more expensive than a year ago, amid rising oil prices and increased demand for soybean oil due to restrictions on the use of imported rapeseed and waste oil for biodiesel production in the US.

 

April Brent crude futures rose 4.9% to $70.8/barrel in a week on expectations of a war in Iran and US demands that Iran conclude a new agreement within 2 days to limit its plans to develop nuclear weapons and long-range missiles.

 

Rising soybean oil prices in Chicago have not yet supported quotes for palm oil and sunflower oil, which have even declined slightly due to reduced demand from importers.

 

May palm oil futures on Bursa Malaysia rose 1% to 4,054 ringgit/t or $1,042/t for the week, but fell 2.6% overall in two weeks as export rates for 20 days in February were 8.9-12.6% lower than in January and forecasts of increased production in February were confirmed. A year ago, palm oil quotes were 4,511 ringgit/t or $1,016/t, and were under pressure from a strengthening local currency.

 

Reduced demand from India led to a decrease in prices for sunflower oil delivered to India within a week by another $10/t to $1,400/t CIF Mumbai.

 

India is actively abandoning expensive soybean and sunflower oil and switching to importing palm oil, and also continues to harvest its own oilseed crops, which increases supply.

 

Offer prices for Russian sunflower oil fell by $10-30/t to $1,280/t FOB over the week amid increased supply from Argentina and Bulgaria, which is starting to process Argentine sunflower.

 

In Ukraine, sunflower oil demand prices fell by $10/t to $1,270-1,280/t delivered to ports in a week under the pressure of falling prices in the EU. However, it should be recalled that a year ago, prices were $1,110-1,120/t delivered to ports.

 

Bulgarian farmers say they still have 600,000 tons of their own sunflower in stock, so the import of about 400,000 tons of sunflower from Argentina could have a major impact on the domestic market. Therefore, farmers are asking for careful inspection of imported sunflower for pesticides and heavy metals, but still, supplies of cheap Argentine sunflower will put pressure on the prices of Black Sea sunflower oil.