According to Oil World, a modest increase of only 1.2% in world vegetable oil production is forecast for the Sept-23/Oct-24 season. The existing surplus will gradually turn into a supply shortage during the course of this season.
Palm oil remains by far the world’s largest producing oil. A harvest of more than 81 MnT is expected, representing more than 37% of total oil production.
Currently, global palm oil stocks remain high. Substantial increases in China and India have more than offset significant declines in palm oil stocks in Indonesia.
However, according to Oil World, a global production shortfall is forecast in Jan/Sept 2024, with stocks expected to decline by 0.9 MnT, mainly in Malaysia, Indonesia and India. The main risk factor that may further dampen production is the uncertain effects of El Niño on palm oil and lauric oil production.
In Russia, favourable weather conditions during most of the growing season facilitated above-average yields. APK Inform estimates Russian sunflower seed production at 17 MnT, slightly below last year’s level. In Ukraine, oilseed production is expected to reach a 4-year high of 23.6 MnT in 2023, an increase of 3.3 MnT. The sunflower harvest advanced rapidly in September, thanks to favourably dry weather, with comparatively high yields.
The vegetable oil market has experienced strong price pressure in recent weeks due to the unusually strong supply of sunflower, which has been a major bearish factor. Prices relative to other oils are the main support for sunflower prices. The narrow spread between palm olein and sunflower in recent weeks has reduced enthusiasm for palm oil among the more price-sensitive buyers (China, India, Pakistan, etc.), who have increased purchases of sunflower due to its more attractive prices.
To learn more about the market situation, we invite you to read LIPSA’s Market Report, which you can download by clicking on the button above, and in which we discuss the following points:
1. Vegetable oil prices
2. Production highlights in oilseeds and vegetable oils
3. Palm oil (CPO)
4. Soybean oil (SBO)
5. Sunflower oil (SFO)
6. Rapeseed oil (RSO)