Soybean and palm oil prices have stopped rising, but sunflower oil continues to rise
Global vegetable oil markets remain under pressure from shifting supply routes caused by the US-China trade war, but sunflower oil prices are rising amid lower crop forecasts in Ukraine and the EU.
Analysts at Oil World (Germany) predict an increase in global imports of eight main types of vegetable oils in the 2025/26 MY by 3.1 million tons to 94.5 million tons compared to the previous season.
At the same time, thanks to active demand from the USA, Indonesia and Brazil, global consumption of eight main types of vegetable oils will increase by 6.1 million tons per year, which will significantly exceed last year's increase of 2.5 million tons.
However, due to limited supply, achieving such volumes may be a challenge for the global market. The deterioration of the situation with global soybean oil reserves is also due to the rapid growth of consumption in the US due to the state policy of developing biofuels and supporting the use of domestic raw materials, as well as a decrease in UCO imports from China. Experts believe that soybean oil consumption in the US in 2025/26 MY may increase by 2 million tons, which will lead to a further reduction in imports of used and rapeseed oil from Canada.
Combined vegetable oil exports from Indonesia, Argentina, Brazil and the US could fall by 2.2 million tonnes due to crop fluctuations and changes in national biofuel programmes, increasing the world market's dependence on exports from the Russian Federation, Ukraine, Malaysia and Canada. In particular, in Indonesia, a possible increase in the share of biofuels to 45-50% will be a decisive factor for palm oil exports, which would reduce palm oil exports and increase demand for soybean oil as a substitute.
Demand prices for sunflower oil in Ukraine increased by $20-30/t to $1,230-1,245/t for delivery to ports in October-November, amid delays in sunflower supplies and rising demand prices in the EU.
Demand prices for Ukrainian sunflower oil with delivery to the EU have increased to $1,340-1,360/t DAP Italy, Greece, although demand prices for Ukrainian rapeseed and soybean oil remain at $1,220-1,260/t DAP Poland, Germany.
From the beginning of the current season (July 1, 2024) to October 14, EU countries reduced imports of vegetable oils by 26% compared to the previous season to 1.236 million tons, the European Commission reports. Thus, imports of sunflower oil during this period fell by 25% to 426.2 thousand tons, palm oil – by 25% to 725.5 thousand tons, while imports of soybean oil increased by 160% to 200.2 thousand tons and rapeseed oil – by 1% to 84.4 thousand tons.
Sunflower and soybean oil are imported in the current season mainly from Ukraine (396.4 thousand tons and 106.4 thousand tons), palm oil - from Malaysia (211.5 thousand tons) and Indonesia (202.7 thousand tons).
Recall that the EU imposed a 50% duty on imports of oils from the Russian Federation and a 6% duty on imports from Kazakhstan.
Demand prices for Russian sunflower oil increased by $10-20/t to $1,200-1,210/t FOB during the week. Demand prices for Kazakh sunflower oil are $1,160-1,170/t at the border with China, and prices with delivery to China remain at $1,260-1,280/t.
Quotes for sunflower oil for delivery to India were trading at $1,310/t CIF Mumbai during the week.
November palm oil quotes rose 0.5% to 4,505 ringgit or $1,066/t in the past 7 days due to a slowdown in exports. Malaysian palm oil exports in the first 20 days of October rose 2.5-3.4% compared to the same period in September, although the lead in the first 10 days of October was 15-17%.
December soybean oil futures on the Chicago Board of Trade fell 1.3% to $1,115/t yesterday, completely erasing the 1.3% weekly gain, and are trading 1.8% higher than a month ago.
Low oil prices will continue to put pressure on biofuel prices and, consequently, on palm, rapeseed and soybean oils, so the premium on sunflower oil will also decrease as the market becomes saturated with supply.
