Against the background of rising oil prices, palm and soybean oil prices rose, despite the absence of fundamental supporting factors

A 2.5% rise in oil prices this week supported palm oil and soybean oil, although overall markets remain under pressure from higher production and lower exports.

April palm oil futures on the Bursa Malaysia exchange rose for three straight sessions and rose 1.58% yesterday to 3,924 ringgit/t or $824/t (+1.6% on the week), remaining fairly stable for two weeks

According to surveyors AmSpec Agri and Intertek Testing Services, for February 1-25, compared to the same period in January, Malaysia reduced exports of palm oil products by 11.8-14.3% to 860-950 thousand tons, which increases the pressure on quotations. especially in anticipation of the spring increase in production.

Next week, a major industry conference will be held in Kuala Lumpur where production and consumption forecasts for Malaysia and Indonesia to 2024 will be presented.

According to the forecasts of the Indonesian Palm Oil Association GAPKI, in 2024 Indonesia will increase production by 5% to 57.6 million tons. At the same time, the export of palm oil from Indonesia in 2023 decreased compared to 2022 by 2.7% from 33.1 to 32.2 million tons. Export earnings also decreased, as the average price in 2023 was lower than in 2022.

In 2023, the use of palm oil in the production of biodiesel is expected to exceed consumption in the form of food. According to the Ministry of Energy of Indonesia, the consumption of biodiesel in 2023 was 12.2 million kiloliters, and in 2024 it will reach 12.5-13 million kiloliters.

On the exchange in Dalian, the most active soybean oil contract rose by 0.94% yesterday, and palm oil – by 1.04%.

On the Chicago Stock Exchange, March soybean oil futures rose 2% to $989/t (-1.5% on the month) from Monday, after last week’s 3.2% decline, although they remained under pressure from lower soybean prices. due to favorable weather in South America.

An increase in soybean and sunflower oil deliveries from Argentina in March-April, against the background of a seasonal increase in palm oil offers, will keep quotations low.

Demand prices for sunflower oil with delivery to buyers this week fell another $5/t to $810/t, and in Ukrainian ports – to $725-740/t. Due to the blocking of the border with Poland, queues at the borders with other countries have increased, which has reduced demand prices for oil deliveries to the EU by rail and road.

Tags: soybean oil, prices, palm oil