In recent weeks we have experienced high volatility in the vegetable oil market. Uncertainty surrounding the evolving trade war between the US and many of its major trading partners helped to fuel this volatility.

Palm oil has regained its position as the cheapest oil, recovering market share, while soybean oil has lost most of its competitiveness. Rapeseed oil prices have been appreciating as EU supply has been reduced.

On the other hand, sunflower oil prices remain firm due to tight supplies. At the price level, July-August-September was quoted a few days ago at USD 1,220/ton at FOB 6 Ports, while October-November-December (new season) was quoted at a discount of USD 100/ton. This price scenario assumes normal or favourable weather conditions for a good harvest.

In the global supply/demand balance for sunflower there is no room for further production failures. Any delay in the harvest would add even more pressure to the market. The premium for high oleic vs. conventional sunflower is currently offered at around 200 USD/tonne for the new season. This is higher than at the same time last year, but still significantly lower than current season offers.

In lauric oils, coconut oil prices recently soared to a new high of USD 2,600/tonne, CIF Rotterdam. At these levels, a fall in demand is to be expected. Declining production and increased biodiesel blending requirements are slowing exports from the Philippines, the world’s leading coconut oil exporter. Adverse weather conditions have also severely affected production.

Palm kernel oil has developed a large premium over palm, but remains at a large discount to coconut oil. Production is expected to improve seasonally from April to September. However, supply shortages of rival coconut will continue to be a factor in supporting prices.

For first-hand information on these and other aspects of the vegetable oil market, we invite you to download and read the LIPSA Market Report by clicking on the button above, where we cover the following points: