Despite the record global soybean harvest, prices for soybean oil are higher than for the usual premium sunflower oil

Egypt’s GASC purchased sunflower oil at a tender 24 dollars per ton cheaper and soybean oil at 23 dollars per ton more expensive than in the previous tender.

The global vegetable oil market remains in a strange situation where, despite the record soybean harvest, prices for soybean oil are higher than for the usually premium sunflower oil, even though the sunflower harvest in Ukraine has declined and will also be below average in the new season.

On June 13, the Egyptian State Agency GASC held an international tender for the purchase of vegetable oil for delivery from July 20 to August 5, 2023, as well as a tender for the purchase of vegetable oil in the domestic market.

It was planned to purchase soybean and sunflower oil with immediate payment. The purchase is financed by the International Islamic Trade and Finance Corporation (ITFC).

The previous international tender for the purchase of oil, scheduled for June 6, was canceled for unknown reasons.

The international tender received 3 offers for the supply of sunflower oil at prices of $926, $994 and $1,000.5 per tonne with immediate payment and 7 offers for the supply of soybean oil at prices of $1,075-1,119 per tonne with immediate payment. It is worth noting that the bid prices for soybean oil were almost at the same level as in the May 11 tender, while the bid prices for sunflower oil decreased by USD 60-75 per ton compared to the previous tender.

As a result of the auction on June 13, Egyptian GASC purchased 18 thsd tonnes of vegetable oil for delivery from July 20 to August 5, 2023, including:

– 12 thsd tonnes of soybean oil from Green Suppliers and Aston Agro at a price of USD 1048 per tonne C&F with immediate payment, which was USD 23 per tonne higher than in the tender on May 11, 2023 and USD 277 per tonne lower than in the tender at the end of February;

– 6 thousand tons of sunflower oil from TOI Comodities with immediate payment at a price of $926 per tonne C&F, which is $24 per tonne lower than at the tender on May 11 and $94 per tonne lower than at the tender on April 19 and $314 per tonne lower than at the end of February.

It remains unclear why GASC purchased the more expensive soybean oil, while there were other offers for cheaper and higher quality sunflower oil.

According to the latest data from the Egyptian industry, Egypt’s palm oil imports are expected to decline to 1 million tons in 2023, down 10% from 2022, which is also a bit surprising that cheaper palm oil imports are declining.

Tags: sunflower oil, soybean oil, prices