Market Report |

Market Report JULY

Only coconut and palm kernel oils have fallen in price during the second half of June and the first of July. The rest of the main vegetable oils have risen again strongly. The reasons that have pushed prices up in recent weeks are several, highlighting:

• Climatic problems in Canada that will significantly reduce the rapeseed harvest.
• The uncertainty surrounding soybean production in the US.
• The slow recovery of palm production in Asia.

At the same time, demand from many countries has slowed down, deferring purchases and consuming stocks, waiting for a good oilseed harvest to push prices down in the short term.

The attached table shows the prices of the main oils and other reference values and their variation in the last 4 weeks:

Palm oil production in Indonesia has grown 6.3% in May and it is believed that in June it will also have exceeded 4 million tons. Annual production is expected to reach 49 MTs, which would represent an increase of 2 MTs vs. 2020. However, end month stocks have fallen for the seventh consecutive month, due to strong growth in exports and domestic consumption.

On the other hand, in Malaysia production continued to grow in June, but below expectations, mainly due to a lack of labor. End month stocks continue to be very low, (they are equivalent to only 5 weeks of consumption).

In the case of sunflower oil, prices seem to have found a short-term equilibrium, after falling sharply during May and June. The firmness in the prices of the rest of the oils, the concern about the weather in some important productive areas and the good competitiveness of these price levels for the 21/22 campaign (now at a discount vs the SBO) have led to the recovery of prices during the last month.

In order to better understand these and other points, we invite you to download and continue reading the LIPSA market report that we attach below, where you can find out first-hand about:

1. Evolution of reference markets
2. External factors
3. Rapeseed oil
4. Palm oil
5. Soybean oil
6. Sunflower oil
7. Lauric oils (coconut and palm kernel)