🇨🇳 Amid increasing supply, demand for vegetable oils continues to decline, especially as the Chinese New Year celebrations approach.
⛈️ Heavy rains are delaying the soybean harvest in Brazil, which is supporting soybean oil prices amid drought in Argentina. However, improving weather as early as early February could put more pressure on prices.
⚖️ The increase in the export duty on sunflower oil in the Russian Federation from February 1 by 10% to $180/t (due to an increase in the indicative price by 4% per month to $1,068.5/t) led to a sharp increase in the supply of Russian oil on the world market at reduced prices, which significantly reduced demand for Ukrainian products.
📊 As of January 24, the difference between prices for Ukrainian and Russian sunflower oil on a CIF Mersin basis reached $40/t – the highest figure since November last year.
🤔 Ukrainian processors do not have significant sunflower stocks and are working almost "at full capacity", so the cost of oil is very high. At the same time, half of the plants are facing a shortage of raw materials, as farmers are holding back sales in anticipation of further price increases.
📉 According to Trading Economics, the average price of sunflower oil delivered to buyers decreased by 1.6% to $1,271/t (-2.8% in two weeks) during the week.
🔎 Demand prices for sunflower oil delivered to Ukrainian ports this week remain at $1,100–1,110/t, while supply prices have increased to $1,130–1,150/t due to a sharp increase in sunflower prices.
📉 April palm oil futures on the Bursa Malaysia exchange fell 5.2% to 4,218 ringgit/t or $965/t in two weeks due to a decline in exports in January. According to surveyors, Malaysia reduced its exports of palm oil products by 18.9-24.1% in the period from January 1 to 25 compared to the same period in December.
🤔 Rising soybean oil prices are supporting neighboring vegetable oil markets, but a tariff reduction in Argentina, a record soybean harvest in Brazil, and possible new trade wars involving the US as early as February could dramatically change the situation.
📉 March soybean oil futures on the Chicago Board of Trade fell by 2.6% in two weeks to $991/t (+10% per month), but the market expects the introduction of new tariffs between China and the US.
⚖️ According to data from the China National Grains and Oils Information Center CNGOIC, the country's stocks of the three main types of vegetable oils decreased by 6.5% year-on-year to 1.85 million tons, in particular palm oil - from 790 to 470 thousand tons, while soybean oil increased from 830 to 900 thousand tons, and rapeseed oil - from 350 to 480 thousand tons.
📻 Source: GrainTrade / Ukrainian electronic grain exchange
