Palm oil prices remain steady for a third week, while soybeans continue to fall

A seasonal increase in the supply of vegetable oils in the global market is increasing the pressure on quotations, especially against the backdrop of reduced demand from India and China.

India cut edible oil imports to a 16-month low in October as refiners cut purchases due to increased inventories.

Lower risks of confrontation in the Middle East led to a 5% drop in oil prices, which increased pressure on vegetable oil prices.

January palm oil futures on the Malaysian exchange traded near the 3,750 ringgit/t level for a third week and reached 3,768 ringgit/t or $795/t on Friday, putting pressure on higher soybean oil quotes. Low palm oil prices will restrain price growth in neighboring markets.

December soybean oil futures in Chicago for three weeks fell by 9.8% to $1,088/t (-11.8% for the month) against the background of increased arrivals of the new soybean crop in the US.

Experts expect that in 2024, palm oil production in Malaysia will remain stable, and in Indonesia – will decrease by at least 1 million tons. At the same time, palm oil futures from November 2023 to June 2024 will be traded in the range of 3,700-4,500 ringgits/ t. It is also predicted that India will introduce a mandatory B35 biodiesel mandate that will be in effect throughout 2024.

The main factors influencing palm oil prices will be the drought caused by the El Nino phenomenon and the production volumes of oil and biofuel.

Demand prices for sunflower oil remain at the level of $850/t with delivery to buyers, as the volume of offers of Ukrainian sunflower oil with delivery through Black Sea ports is increasing. Ukrainian exporters are trying to regain the markets captured by Russian sellers of sunflower oil during the blockade of the Black Sea ports.

Low meal prices are weighing on sunflower processing margins, and a large global crop of corn and feed wheat will limit near-term gains in feed grain and meal prices, especially with forecasts for increased soybean production in South America, where the weather favors planting.

Tags: sunflower oil, soybean oil, prices, palm oil