Demand and prices for vegetable oils are gradually rising amid blocked exports from Ukraine and drought in the EU and the US

Over the past month, demand and prices for vegetable oils have been gradually increasing amid blocked exports from Ukraine and lower forecasts for rapeseed in the EU and soybeans in the US due to drought. Therefore, traders closely followed the results of the Egyptian tender for the purchase of food, which became an indicator of price trends.

The state-owned Egyptian operator GASC purchased 45 thsd tonnes of vegetable oils, including 33 thsd tonnes of sunflower oil at the international tender on July 26 at the price of 1080 $/t C&F in the following batches:

• 12 thsd tonnes from TOI Commodities for delivery on August 6-20,
• 10 thsd tonnes to Oliva AD for delivery on August 6-20,
• 5.5 thousand tons to Aston Agro Industrial for delivery on August 6-20,
• 5.5 thsd tonnes from Aston Agro Industrial for delivery on August 20 – September 5.

In addition, the company purchased 11.875 thousand tons of soybean oil from LDC at a price of $1150/t C&F for delivery from August 20 to September 5.

The purchase price of sunflower oil was $154/t higher and that of soybean oil was $102/t higher than at the previous tender on June 13. And the volume of purchased oil tripled, which indicates unjustified expectations of GASC to reduce prices on the eve of the new season.

The number of bids submitted for the tender has also increased. Thus, GASC received 6 offers of sunflower oil at the price of 1114-1196 $/t, and 8 offers of soybean oil at the price of 1200-1259 $/t.

High prices for soybean and sunflower oil due to reduced supplies from Ukraine, USA and Argentina amid declining stocks of soybeans and sunflower and lower forecasts of soybean crop in the United States in the new season.

Yesterday on the Chicago stock exchange September futures for soybean oil fell 1.8% to 1450 $/t (after rising for the week by 10%), and December – by 1.8% to 1370 $/t (+11.9% per month).

Tags: soybean oil, EU, prices, USA, rapeseed oil, Ukraine, sunflower oil, Egypt