The decrease in oil prices has stopped the rise in prices for vegetable oils, but the price of sunflower in Ukraine continues to rise

In the October report, USDA experts left the forecast for the world production of vegetable oils in FY 2024/25 at the level of 227.12 million tons (222.42 million tons in FY 2023/24, 216.8 million tons in FY 2022/23 and 208.62 million t in 2021/22 MR), as a slight reduction in palm oil production is compensated by an increase in sunflower and rapeseed oil production.

However, as a result of the balance adjustment for the 2023/24 MY, palm oil stocks were reduced by 1.5 million tons, as a result of which the estimate of world ending stocks was reduced from 30.36 to 28.8 million tons (compared to 30.29 million tons in the previous season) .

That gave a big boost to palm oil prices in Malaysia, where December futures rose 2.8% to 4,350 ringgit/t or $1,015/t on Friday's report, but were down 0 yesterday amid falling oil prices. .9% to 4,313 ringgit/t or $1,006/t.

December Brent crude futures fell 2.6% to $77/barrel yesterday and continued to fall on negative statistics from China, as traders did not appreciate the Chinese government's new economic stimulus plan presented on Friday.

According to data from China's customs administration, in September, compared to August, the country reduced oil imports by 7.4% due to low refining margins. At the same time, the import of edible vegetable oils from the beginning of the year fell by 24.1% to 5.391 million tons compared to the corresponding period of 2023.

It will be recalled that after the increase in the import duty, India reduced the import of vegetable oils by 33% in September (compared to August) to a 6-month low.

December soybean oil futures on the Chicago Stock Exchange fell 3.6% to $923/t yesterday (-5% for the week, +7.4% for the month) on the back of improved soybean planting conditions in Brazil.

Ukrainian farmers are completing the harvesting of sunflower, which as of October 10, from 4.31 million hectares or 87% of the area, threshed 8.78 million tons with a yield of 2.04 tons/ha. It is already clear that the forecasted 12.5 million tons will not be collected, so processors are gradually raising purchase prices.

During the week, purchase prices for sunflowers with an oil content of 50% increased by another UAH 1,000/t to UAH 24,000-25,000/t with delivery to the plant, but deals were also recorded at higher prices.

During the same period, demand prices for sunflower oil increased by $20-30/t to $1,020-1,040/t, and for meal - by $5-8/t to $215-225/t with delivery to Black Sea ports. Demand for Ukrainian sunflower oil exists mainly from the EU, while demand prices for oil supplies to China remain at a low level of $1,000-1,100/ton.

We will remind that the historical maximum of sunflower prices in Ukraine was recorded in March 2021, when they reached UAH 25,500-27,400/t with delivery to the plant.