The prices of the main vegetable oils have continued to fall in recent weeks, in the case of sunflower and rapeseed very significantly, with falls of more than 10% compared to the end of February. The price of Brent crude and gasoil also follow the downward trend of the oils.
The table below shows the evolution of some oils and other relevant factors in the last month:
At the POC (Price Outlook Conference) that took place at the beginning of the month in Kuala Lumpur, experts highlighted the uncertainty in the vegetable oil markets, pointing out bullish and bearish factors in the coming months.
Among the bullish factors were Thomas Mielke and Dorab Mistry:
- Argentina is set to lose no less than 20 MnT of soybean production.
- China will increase its vegetable oil imports in 2023 by around 3.5 MnT.
- The increase in global sunflower and rapeseed production is expected to be low in 2023/2024.
- Palm oil production will grow less than the increase in consumption.
- Biodiesel production will increase in 2023 by 4.5 MnT.
Among the bearish factors mentioned were the impact on consumption of very high interest rates, which could lead to a drop in activity, as well as the current good availability of several oils, which put downward pressure on prices.
In sunflower, on the other hand, there is uncertainty about the area that Ukraine will be able to plant next season. Realistic data will be available in May. And in rapeseed, the outlook is that, in the best case scenario, the 2023/2024 crop will be similar to that of the current season, which was excellent. Weather will be an important factor to follow in the coming months in Europe as well as in Canada and Australia for rapeseed yields.
In lauric oils -coconut and palm kernel-, prices are very attractive compared to recent months. The price differential vs. palm, which is currently very small (10 and 80 USD/ton last Friday for palm kernel and coconut, respectively) should increase in the coming months. Likewise, coconut should widen its premium vs. palm kernel.
To learn more about the market situation, we invite you to download and read LIPSA’s market report by clicking on the button above, where you will find the following:
1. Vegetable oil prices
2. POC: most relevant comments
3. Evolution July 22/March 23
4. Soybean oil
5. Sunflower oil and rapeseed oil
6. Palm oil
7. Demand for vegetable oils
8. Lauric oils (coconut and palm kernel)