Головна Analytics Oilseed market reviews Oilseeds and processed products market (10.01.22‒14.01.22)

Oilseeds and processed products market (10.01.22‒14.01.22)

  • According to the World Bank forecast, the average annual price of soybean oil will increase by almost 4% in 2022 to $1,425 per ton. The main driver of this growth will be an increase in demand for biofuels, especially in Asia. During 2021, the average annual price of soybean oil increased by 65% ​​compared to the previous year – from $838 to $1385 per ton;
  • In Argentina, grain cargo ships are forced to leave the country’s main ports with a 30% reduction in capacity due to a record drop in water levels in the Parana River, according to a Nasdaq report. The water level in Parana in January reached its lowest level since the end of 2019 due to dry weather conditions;
  • The USDA reports that India has placed limits on stocks of soybean grist from December 23, 2021 to June 30, 2022 in an attempt to curb domestic price increases. The imposition of restrictions on stocks of soybean grist could reduce processing, which in turn would increase soybean availability and potentially keep soybean prices under control;
  • By the end of 2025, the country’s soybean production is planned to increase by about 40% compared to the current level, to 23 million tons, according to a statement from the Ministry of Agriculture of China. In 2021, it decreased by 16% compared to the level of 2020, to 16.4 million tons.

USDA experts in the January report left unchanged the assessment of the oilseed crop in the Black Sea region in 2021/22 MY, namely at the level of 52.1 million tons (sunflower – 36.85 million tons, soybeans – 8.61 million tons, rapeseed – 6.63 million tons). Ukraine remains the key oilseed producer in the region. It is expected that the gross harvest of Ukrainian-produced sunflower in 2021/22 MY will amount to 17.5 million tons, soybeans – 3.7 million, and rapeseed – 3.05 million tons.

At the same time, the forecast for world soybean production and exports is lowered due to the revision of estimates for the countries of South America, mainly due to dry weather conditions observed in the region.

Thus, the forecast for world production of soybeans in 2021/22 MY has been reduced by almost 10 million to 372.5 million tons (against 381.7 million tons according to preliminary estimates), which, nevertheless, is still significantly higher than the level of the previous season (366.2 million tons).

World soybean exports in the current season are expected to reach 170.7 million tons, which is also inferior to the preliminary forecast (172.3 million), but higher than in the previous MY (164.7 million).

According to our price monitoring, during the reporting period, mainly positive price adjustments were recorded in the domestic markets of key oilseeds and their derivatives.

In the sunflower segment, prices continued to grow during the reporting week. On the basis of EXW, sunflower seeds were traded within 19400-19800 UAH/t (+5.4%), whereas on the terms of CPT enterprise within 19600-20000 UAH/t (+5.3%). The market is seeing a resumption of business activity after the winter holidays. Raw oil prices rose amid a general trend towards rising prices for vegetable oils (first of all, palm oil) on the world market.

An additional price support factor was the publication of reduced forecasts for soybean production in South America and the growth of oil futures.

Sunflower oil produced in Ukraine on FOB basis in the Black Sea ports following the results of the reporting period, corrected downward after a significant price jump last week and was traded in the range of 1340-1355 $/t.

In December 2021, 690 thousand tons of Ukrainian-made sunflower oil were supplied to foreign markets (+16% compared to December 2020). At the same time, the total export of Ukrainian sunflower oil during September-December 2021 still decreased by 6% compared to the same period in 2020 (according to OilWorld).


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