Prices for Palm and Soybean Oils Decrease While Sunflower Oil Prices Continue to Rise
17/06/2024 (Grain Trade) - The global market is experiencing an increase in the supply of vegetable oils, which is restraining the growth in prices for palm and soybean oils, despite the ongoing speculative rise in prices for sunflower oil.
July futures for palm oil on the Bursa Malaysia exchange fell by 1% over the week to 3936 ringgit/ton or $834/ton, remaining stable for almost two months amid rising production and falling exports. According to Oil World, Malaysia increased palm oil production by 13.5% in May compared to the previous month, reaching 1.75 million tons, which is also 12.3% higher than the same period in 2023 (1.52 million tons).
High production and falling product prices in the first half of May allowed the country to increase oil exports to 1.38 million tons compared to 1.08 million tons in May 2023.
Thus, since the beginning of 2024, Malaysia has produced 7.26 million tons of palm oil (6.64 million tons in January-May 2023) and exported 6.31 million tons (5.92 million tons).
Palm oil stocks in the country as of the end of May were estimated at 1.75 million tons (1.69 million tons a year earlier).
According to Oil World, Indonesia exported 7.58 million tons of palm oil from January to April 2024, significantly lower than the same period last year (8.37 million tons). The lower export rates are due to reduced production caused by a lack of rainfall in palm-growing regions.
July futures for soybean oil in Chicago remained virtually unchanged over the week, trading at 963 $/ton but fell by 4.1% over the month amid the completion of harvesting in Brazil and Argentina and good planting conditions in the USA.
According to Trading Economics, the average price of sunflower oil delivered to buyers increased by 2.5% over the week to 943 $/ton, up 10.8% over the month due to reduced supply from Ukraine and increased demand from importers in India and the EU.
The latest tender in Egypt showed that prices for soybean oil remain at the same level, and the number of supply offers has increased, limiting the rise in prices for sunflower oil.
In its June report, FAS USDA slightly lowered the forecast for global vegetable oil production in 2024/25 MY by 0.39 million tons to 227.89 million tons, still 1.9% higher than in 2023/24 MY (223.8 million tons in 2022/23 MY and 218.33 million tons in 2021/22 MY), due to a reduced forecast for rapeseed oil production by 0.34 million tons to 33.68 million tons compared to 33.97 million tons in the previous season.
The forecast for global vegetable oil consumption in 2024/25 MY was slightly reduced by 0.06 million tons to 224.84 million tons (218.82; 211.2 and 202.8 million tons), leading to a slight reduction in the forecast for global ending stocks of oils in 2024/25 MY by 0.11 million tons to 29.8 million tons, which is 6.5% lower compared to the current season (31.74 million tons, 29.9 million tons, and 29.59 million tons) due to reduced stocks of palm and rapeseed oils.