In the last fortnight, vegetable oil prices have recovered from recent lows. We are now entering a critical period in the northern hemisphere for oilseed production.
The latest climate models from various agencies set the possibility of an El Niño phenomenon occurring around June this year. If this is the case, it is likely to have an upward effect on vegetable oil prices.
The table below shows the evolution of some oils and other relevant factors in recent weeks:
Malaysian palm stocks fell sharply in April by -10.5% vs. March and to the lowest level in 13 months. Production fell by 7% vs. last month, well below previous expectations.
Similarly, the latest report issued by GAPKI for February indicates that Indonesia’s CPO stocks were close to a 4-year low, 14% lower compared to January and 47% lower compared to February 2022 levels.
The market remains in inverse. The more distant months are currently under pressure from the seasonal increase in production.
Meanwhile, coconut oil prices in Rotterdam remained at a premium of USD 60-70 vs PKO in March and April. Preliminary data show that Philippine exports in January/March 2023 are about 30% below the previous year’s high level, due to a reduction in yields and copra production. Prices move between low demand and declining production.
In Ukraine, the condition of sunflower crops is improving and they are generally favourable. Planting progress is somewhat slower than normal due to rainfall at the beginning of the period: as of 4 May, 1.48 M ha were planted in Ukraine, about 26% of the expected area of 5.6 M ha, + 13% vs. 2021/22. Seed production is expected at 13/14 MTn vs 11.2 MTn last year. Planting progress and weather in the Black Sea countries will have a significant impact on prices in the coming months.
In the case of rapeseed, planting is now starting in Canada. Conditions are not very favourable, due to dry and very warm weather in many areas. Rainfall is required during this month so that yields are not affected.
To learn more about the market situation, we invite you to download the LIPSA market report on the button above, in which we discuss the following points:
1. Vegetable oil markets
2. Sunflower oil
3. Rapeseed oil
4. Soybean oil
5. Palm oil
6. Lauric oils