Vegetable oil prices have fallen sharply in recent days, after several weeks at historically high levels. Two determining factors in this drop are the reopening of palm exports from Indonesia and the surprisingly high flow of sunflower seed being exported from Ukraine.
The following are the evolution of some oils and other relevant factors in the last weeks:
World oilseed production in the 22/23 season is estimated to reach 620.5 million tonnes, (+35.8 Mts vs. 21/22): practically all the growth comes from the soybean, while the expected increase in rapeseed more than compensates for the losses in sunflower. With these figures, stocks would grow by 12.3 Mts: the big question is how this production will be available for the market.
Exports of sunflower seeds from Ukraine, practically all of them to Europe, have reached very high levels: 352,000 tonnes in May, the highest in more than 20 years, which will be even higher in June. This factor has surprised the market and is putting downward pressure on prices.
Sowing in Ukraine ended with 4.7 million ha, which represents a 27% drop vs. the previous season. The weather continues to be somewhat dry, and there is concern not only about the lack of basic inputs and fuel, but also about the storage capacity needed with the arrival of the new crop.
In the case of palm, stocks in Indonesia in April are estimated at 6.1 Mts, which represents an all-time record. The ending stock at the end of May is likely to be higher. This is putting strong pressure on the market, not only because they will be available for the market at some point, but also because of the scarce storage capacity in the country, which is causing serious problems.
In this changing and uncertain scenario, we invite you to download and continue reading LIPSA’s market report below, where you will be able to get first hand information on:
1. Evolution of reference markets
2. Macroeconomic context
3. Oil and oilseeds balance 22/23
4. Vegetable oils demand: China and India
5. Palm oil
6. Sunflower oil
7. Soybean oil
8. Rapeseed oil