Головна Analytics Oilseed market reviews Oilseeds and processed products market (22.11.21–26.11.21)

Oilseeds and processed products market (22.11.21–26.11.21)

After two years of high prices and a shortage of supply, the global markets for key vegetable oils are likely to see a reversal in the 2021/2022 season.

  • Egyptian state agency GASC purchased 69 thousand tons of soybean oil through a tender, of which 39 thousand were purchased from local suppliers, and another 30 thousand from ADM with a delivery date between January 15 and 31 at a price of $1,468 per ton on CIF terms. Proposals for the supply of sunflower oil at a price of 1458-1475 $/t CIF came from producers of the Black Sea region, but purchases did not take place;
  • Reuters reports that the Turkish State Grain Council TMO pre-purchased about 6 thousand tons of crude sunflower oil at an international tender with supply on December 1-20 at a price of 1485 $/t on CIF terms;
  • According to Biofuels International experts, Indonesia’s palm oil exports and production are likely to contract for the second consecutive year this year, due to a sharp drop in crude palm oil exports and production problems. At the same time, the export of refined oil will grow;
  • According to the data of the European Commission, since the beginning of the current season, the EU countries have imported 1.7 million tons of rapeseeds in total, which is 38% less than in the same period of the previous season (2.74 million tons) and 47% less than the volume of imports in the 2019/20 season (3.21 million tons). 71% of the total volume of rapeseeds supplies to the EU for the last period of the season was provided by Ukraine (1.2 million tons).

Thomas Milke, executive director of Oil World analyst firm, estimates that global production of the four main vegetable oils – palm, sunflower, soybean and rapeseed, is likely to rise to the highest levels in the last four years, reaching 6.3-6.8 million tons in 2021/22 MY.

In particular, the world production of palm oil is projected to increase by 3.5-4 million tons in 2021/22 MY and will reach almost 80 million tons. Production volumes in Indonesia will increase by 1.7-2 million tons, in Malaysia – by 1–1.2 million tons.

As a result, the current high level of world prices for vegetable oils cannot be sustained for long. Prices are likely to drop significantly in the first half of next year. In turn, a long period of high prices created the basis for the resumption of production, and also prompted agricultural producers in different countries to increase the area under oilseeds this year.

According to our price monitoring data, during the reporting period, multidirectional price adjustments were recorded on the domestic markets for key oilseeds and their derivatives.

In the sunflower segment, prices continued to rise during the reporting week. On the EXW basis, sunflower seeds were traded within the range of 19400-19800 UAH/t (+3.2%), while on the CPT enterprise basis – 19600-12000 UAH/t (+2.6%). Agricultural producers are holding back sales, heating up raw material prices and expecting a drop in transportation costs.

The limited supply of sunflower seeds supports sunflower oil prices. On the export basis, Ukrainian-made sunflower oil holds high positions: on the FOB basis in the Black Sea ports at the end of the week it was traded in the range of 1420-1435 $/t.

Soybean prices on the domestic market did not decline last week. On the EXW basis, they were traded in the range of 14800-15200 UAH/t. On CPT port terms, beans occupied the price range of 15600-16000 UAH/t (+0.6%).

In the rapeseed segment, prices last week were mostly stable, holding high positions both on domestic and export bases. So, on FOB terms, they fluctuated in the range of 760-775 $/t.

According to the preliminary estimate of the Association “Ukroliyaprom”, in 2021/22 MY production of the main oilseeds in Ukraine will reach 22.3 million tons against 18.46 million in 2020/21 MY (+21%). In particular, the production of sunflower seeds is projected at 16 million tons (+22%), rapeseed – 3 million tons (+7%), soybeans – 3.3 million tons (+29%).

o-29.11-eng

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