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Market Report JANUARY 2024

The year 2023 was marked by a downward trend in major vegetable oil prices. Global vegetable oil supplies were ample during the second half of 2023, due to good production and high stocks in importing countries.

• Palm oil: Indonesian exports reached a 4-year high, resulting in ample stocks in major importing countries, particularly India, and subdued demand. Global stocks peaked in December.

• Sunflower/rapeseed: Sunflower exports increased to record levels, sometimes at discounted prices compared to palm oil and in contrast to the generally high premiums of previous years. In the case of rapeseed, the recovery of Canadian production and abundant supply in the EU and Ukraine put pressure on prices.

• Soybeans: prices remained uncompetitive until the third quarter of 2023 due to very low production in Argentina. Prices have been under pressure, following the arrival of the US crop and the expectation of a recovery in South American production, despite unfavourable weather conditions in Brazil so far.

The attached graph shows the price variation in 2023 vs. the previous year for the main oils:

On the other hand, shipping costs have soared due to geopolitical tensions. In the last 6 weeks, global freight rates have increased by approximately 120%. Much of this increase is attributed to the recent attacks on commercial vessels in the Red Sea.

So far, the most significant impact has been on container costs. Increasingly, however, bulk carriers are also being diverted and routed via the Cape of Good Hope, with a subsequent increase in transit time and costs.

In our report you can read in detail about the situation in the main vegetable oils and the forecast for 2024 that Thomas Mielke recently made at the PEOC conference.

We invite you to read the LIPSA Market Report which you can download by clicking on the button above, where we discuss the following points:

1. Vegetable oil prices

2. Vegetable oils: recap 2023

3. External factors

4. Palm oil (CPO)

5. Soybean oil (SBO)

6. Sunflower seed oil (SFO)

7. Rapeseed oil (RSO)

8. Outlook 2024: Thomas Mielke