Vegetable oil prices have come under considerable pressure due to the recent sell-off in major global markets, with significant declines in equities, bonds and currencies. On the other hand, the expected seasonal increase in palm oil production, combined with expectations of abundant global soybean supplies, as well as weak energy prices, have put further pressure on vegetable oil prices.

Rapeseed and sunflower oils have already seen their price premiums over soybean oil increase, reflecting recent significant crop failures of rapeseed in Europe and Canada and sunflower in the Black Sea region.

Palm has become the most competitive oil in recent months, returning to the normal situation of recent years. Below is a graph of relative prices over the last year:

The United States has experienced very favourable weather conditions during the current soybean season, so a very good harvest is expected, and this, together with the massive liquidation of global risk, has resulted in a drop in prices.

On the other hand, and as we have already mentioned, the sunflower crop is at a critical moment, due to the scarcity of rainfall and the high temperatures in the world’s major production areas: Ukraine, Russia and Bulgaria. Moreover, no improvements are expected in the short term, so an upward trend in prices is expected.

Canada and its rapeseed crops are experiencing very unfavourable conditions, which will cause a drop in production, the magnitude of which will be known in the coming weeks.

In the lauric oils, coconut and palm kernel, imports from Europe and China are increasing, which has pushed up prices, causing palm kernel to be approximately $400 higher than palm. This has pushed coconut oil up, given that it is an alternative to palm kernel oil in many applications.

Finally, biofuel policies in different countries, the economic situation, the evolution of weather conditions and the final harvest results in key regions are crucial factors to keep an eye on.

To get a first-hand insight into 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 discuss the following points:

1. External Markets

2. Vegetable oils

3. Palm Oil Market (CPO)

4. Soybean oil market (SBO)

5. Sunflower seed oil market (SFO)

6. Rapeseed oil market (RSO)

7. Lauric oils market (palm kernel and coconut)

8. Conclusions