- Last week the Egyptian state agency for the purchase of food GASC on the tender, purchased 39 thousand tons of sunflower oil at a price of 1390 $/t CIF, as well as 30 thousand tons of soybean oil from external suppliers (at a price of 1354 $/t CIF) and 37 thousand tons of soybean oil from domestic suppliers (at a price of 1342 $/t CIF);
- According to Oil World experts, Indonesia increased palm oil exports to 2.58 million tons in October 2021, compared to 2.3 million in October 2020. The main volumes were exported to China, the EU, Pakistan and India;
- According to updated estimates from Oil World analysts, global soybean exports have begun to resume, but cumulative shipments in September-November 2021 were still 3.6 million tons lower than in the same period last year (39 million tons versus 42.4 million tons);
- The Brazilian Oilseed Processors Association Abiove has raised the forecast of soybean production in the country in 2021/22 MY by 0.7 million tons compared to the previous figure – to a record 144.8 million tons, which is 6.5 million more than collected a year earlier oilseed harvest.
The spread of a new strain of coronavirus entails another wave of quarantine restrictions in the United States and European countries. The consequence of such measures, as usual, is a decrease in business activity, which is also reflected in a decrease in the prices of commodities, in particular oil. Following the decline in oil quotes, palm oil futures in Malaysia and soybean oil futures on CBOT show negative dynamics.
The decline in prices for vegetable oils is promoted by the data of the recent USDA report, according to which the forecast for world production of vegetable oils has been raised by 0.18 million to 214.97 million tons, which is 8.52 million more than in 2020/21 MY. At the same time, analysts of the department note that the growth in demand for renewable energy sources and an increase in the consumption of oils in biofuel production will work to support prices.
The forecast for world imports of vegetable oils was reduced by 0.29 million to 86.52 million tons (81.38 million tons in 2020/21 MY), including for India – by 0.35 million to 14.894 million tons (13.8 million from 2020/21 MY), which amid the increase in its own production of rapeseed oil will reduce imports of soybean oil by 0.325 million to 3.4 million tons.
According to our price monitoring data, during the reporting period, multidirectional price adjustments were recorded on the domestic markets of key oilseeds and their derivatives. In the sunflower segment, prices dropped during the reporting week. On the EXW basis, sunflower seeds were traded within the range of 18000-18400 UAH/t (-5.2%), on the CPT enterprise basis – 18200-18600 UAH/t (-5.2%). The key driver of this movement is the decline in sunflower oil prices. Even refiners experiencing a shortage of raw materials are in no hurry to buy sunflower, given the downward trend in oil prices.
Thus, in the short term, the negative price trend in the sunflower segment should be expected to continue. Sunflower oil of Ukrainian production on FOB basis in the Black Sea ports by the end of the week was traded in the range of 1320-1340 $/t (-2.9%). Export prices of Ukrainian-made sunflower oil fell to their lowest level since the beginning of the current season, given the decrease in external demand for negative price trends in adjacent markets.
Domestic soybean prices continued to rise slowly last week, replacing a long period of stability. On an EXW basis, soybeans were traded in the range of 15600-16000 UAH/t (+1.3%). On CPT port terms, they occupied the price range of 16400-16800 UAH/t (+1.2%). At the same time, due to the reduction in external demand, in the near future the direction of the price movement may change again.
In the rapeseed segment, prices last week were mostly stable, holding high positions both on domestic and export bases. On FOB terms, they fluctuated in the range of 765-775 $/t. It should be added that the value of the nearest futures contracts for rapeseed on the EURONEXT exchange resumes its historical maximum.
o-21.12-eng
