The crisis in vegetable oil markets is intensifying, especially against the background of increased biodiesel supplies from China to the EU

Global demand for vegetable oils continues to decline, leading to a further drop in prices. This is due to reduced demand for biodiesel, in particular due to the increase in the number of electric vehicles, especially in China, which supplies more and more biodiesel to the EU, which increases the pressure on quotations.

According to Oil World, in Europe, against the background of the crisis in the biofuel industry, rapeseed oil prices fell to a 3-year low of $840/t, which is $180/t lower than the average in March of this year.

European countries are actively buying biodiesel in China, so the demand for locally produced products has dropped sharply. Thus, in January-April, China increased biodiesel supplies to Europe almost twice compared to the same period last year – from 0.45 to 0.85 million tons, although in April exports fell to a 4-month low of 178,000 tons, which is 30 % exceeded the indicator of April 2022. Moreover, EU countries became the main buyers of Chinese biodiesel.

Against the background of reduced demand and falling prices for rapeseed and sunflower oil, quotations for palm oil continued to decline. July futures on Bursa Malaysia, after rising 2.2% last week, fell 3.98% to 3,403 ringgit/t or $767/t yesterday, losing 4.6% in two days.

Analysts expect palm oil production to grow by 20% in May compared to April, while exports will decline slightly.

On the Chinese stock exchange in Dalian, soybean oil futures fell by 2% yesterday, and palm oil futures fell by 2.3%.

On the Chicago Stock Exchange, July soybean oil futures fell 5.2% yesterday to the lowest level since January 2021 at $1,018/t under pressure from lower soybean prices due to high planting rates in the United States.

Demand prices for sunflower oil with delivery to buyers in a week fell from $870-920/t to $820-870/t amid the reduction to zero of the export duty on sunflower oil in the Russian Federation.

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