The decline in oil prices puts pressure on the vegetable oil markets

2018-11-05 12:07:03
Machine translation
The decline in oil prices puts pressure on the vegetable oil markets

Despite the introduction of U.S. sanctions against Iran on the oil market continued falling prices, which for the last three session lost 3.6% and dropped to 72,29 $/barrel, having multi-month low. Since the beginning of the week Brent fell by 6.1%, WTI – by 5.8%. Reduction of deliveries from Iran was compensated by the increase of oil production in Saudi Arabia and Libya. OPEC countries in October increased daily production to 430 thousand barrels to 33.3 million barrels/day, the highest level since November of 2016.


Under pressure from the oil market amid the seasonal growth of production prices for palm oil are also reduced.


According to estimates by the Indonesian palm oil Association (GAPKI), in 2019 the world's palm oil production compared to the previous year, will rise to 51.6 million tonnes, in particular in Malaysia from 19.6 to 20.2 million tons, Indonesia from 39.8 to 42 million tons. In November – December world stocks reached the highest level, and then begin to decline due to reduced production.


amid increasing production futures for palm oil on the stock exchange in Kuala Lumpur dropped to 514,79 $/t, which is a 3-year minimum.


Experts believe that due to a shortage of soybeans in the domestic market, China will increase the demand for palm oil. Buy may intensify and India, which is planning to reduce import duty on palm oil malaysische from 44% to 40% and refined from 54% to 45% after signing the free trade agreement AIFTA.


After trump statements about the successful negotiations with China, futures on soybean oil in Chicago rose by 2.3% to 621,7 $/t


sunflower oil Market remains under pressure from neighboring markets, soybean and palm oil, as well as the increase in yield of sunflower in Ukraine and Russia. During the week the price of domestic demand for sunflower oil for delivery in November and December fell by 5-7 USD/t to 640-645 $/t, which is 25-30 $/t lower than the level of September. Hopes for increased demand from China that increased its imports of palm oil.

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