Rising sunflower oil prices continue to support high soybean and palm oil prices, despite fundamental factors

The shutdown of almost a third of oil extraction plants, the lack of electricity, and the limited operation of ports due to constant shelling limited the supply of sunflower oil from Ukraine, which led to an increase in prices for Russian oil and supported the prices of related oils.

The offer prices of Russian sunflower oil increased by another $40-50/t to $1,280-1,290/t FOB during the week, as a result of which the demand prices for sunflower oil with delivery to India increased by $30-40/t to $1,390-1,400/t CIF Mumbai.

In Ukraine, demand prices for sunflower oil delivered to ports have also increased by $30/t to $1,270-1,280/t in a week, but supply remains limited due to plant downtime.

Rising oil prices have triggered a sharp increase in sunflower prices in Ukraine, which has sharply increased supply, so we expect that the reduction in frosts will contribute to the resumption of plant operations and an increase in supplies of sunflower and oil at high prices.

Rising sunflower oil prices have boosted palm oil exports from Malaysia, which rose 15-17% in the first 15 days of January, supporting prices. February palm oil futures on Bursa Malaysia rose 0.9% to 4,100 ringgit/t or $1,013/t for the week, but remain under pressure from rising Malaysian inventories to a 7-year high.

March SWOT soybean oil futures rose 2.7% to $1,158/tonne for the week (+7.3% month-on-month), supported by a 7.4% rise in oil prices in two weeks. But uncertainty over US biofuel production in 2026-27 and lower oil prices will put pressure on prices in the near term.

It should be noted that soybean oil prices in Brazil increased by $10/t to $1,130-1,140/t FOB in a week, and prices in China even decreased by $7/t to $1,173/t.

President Trump's threats to raise US tariffs on European countries due to their desire to buy Greenland caused US stock indexes to plummet by 1.7-2.4% yesterday, so we expect a decline in oil prices and an intensification of the crisis and the rupture of economic ties, and accordingly, a decline in demand for energy resources and biofuels.