Sunflower oil prices have started to decline, although palm oil quotes are still rising amid increasing demand

Demand prices for Russian sunflower oil for delivery in August-September decreased by another $5-10/t to $1,130-1,135/t FOB during the week against the backdrop of forecasts of a good harvest and the beginning of a seasonal decline in prices, which has already led to a decrease in demand prices for sunflower oil in Ukraine from maximum levels of $1,160-1,175/t to $1,150-1,160/t with delivery to Black Sea ports.

It is worth noting that prices on the domestic market remain at the level of 52-60,000 UAH/t or 1,170-1,200 $/t on FCA terms due to a shortage of supply and high demand from processors engaged in refining and packaging, as well as exporters.

Good weather in August is contributing to the ripening and filling of sunflower in the main growing regions (except for the eastern and southern regions), so the harvest will be in line with forecasts, although harvesting will begin later than usual - sometime in early September.

In the Russian Federation, the weather is also conducive to the development of sunflower crops, and harvest forecasts have been raised again, so we expect increased competition in the sunflower oil market and a decrease in prices among competitors.

October palm oil futures on Bursa Malaysia rose 4% to 4,560 ringgit/tonne (about $1,080/tonne) in the week, up 8.9% in two weeks on stronger demand from importers and rising prices for sunflower oil from the Black Sea region due to supply shortages. The quotes are supported by data showing an increase in palm oil exports from Malaysia in the first 15 days of August by 16.5-21.3% compared to July.

It is worth noting that soybean oil quotes in Chicago remain under pressure from low soybean prices and uncertainty with exports to China, which will last another one to two months, which will continue to put pressure on oil quotes.

December soybean oil futures in Chicago traded at $1,174/t during the week, down 4.7% from last month.

The market remains in anticipation of an increase in rapeseed and sunflower oil supplies in the coming month, so there will be no price support factors yet that could continue to decline under the pressure of sunflower and soybean harvests.

Oil prices remain stable at $66.2/barrel, down 3.5% in the month amid continued US-Russia negotiations, and new sanctions against Russian oil, which could put more pressure on prices, are not expected yet.