Головна Analytics Oilseed market reviews Oilseeds and processed products market (24.01.22‒28.01.22)

Oilseeds and processed products market (24.01.22‒28.01.22)

Photo: REUTERS/Todd Korol
  • According to S&P Global Platts, US soybean demand in 2022 will be supported by a prolonged drought in major competitors – Brazil and Argentina – which will also push soybean prices higher in the coming months. Brazil and Argentina accounted for about 50% of global soybean supply in 2020-21, according to the US MA;
  • According to MA of Canada, more than 20 million tons of canola can be harvested by Canadian farmers in 2022/23 MY. An increase in harvest is expected due to an increase in yield indicators, while the sown area, according to experts, will decrease by 3% over the year to 8.8 million hectares, as farmers reorient themselves to other crops;
  • According to Oil World experts, the volume of deliveries of Argentina soybean oil to India in January may decrease (compared to 249 thousand tons in December). At the same time, oil of Argentina origin will continue to account for the bulk of the market. In addition to Argentina, Brazil, the USA and Paraguay were the largest suppliers of soybean oil to India in December;
  • According to Oil World experts, in December Ukraine supplied 291 thousand tons of sunflower oil to the Indian market, which exceeded both the previous month’s figure (173 thousand tons) and December 2020 (236 thousand tons), as well as the maximum for this month for the last 3 years.

Palm oil futures continue to reach new record levels as the Indonesian government enforces restrictions on crude oil exports, even as production is expected to increase in both countries.

Starting from January 27, in addition to export duties, Indonesia has a requirement to sell part of the produced palm oil on the domestic market at a certain price, which is a factor of pressure on producers and exporters. At the same time, according to the forecast of the Indonesian Palm Oil Association experts, palm oil production in the country in 2022 may increase to 49 million tons, exceeding last year’s figure (46.9 million tons).

In turn, one of the consequences of such restrictions will be a reduction in palm oil imports from the largest consumer – India. The Malaysian Palm Oil Council estimates that India will reduce palm oil imports by 5% in 2022. One of the factors behind this decline will be an increase in domestic oilseed production.

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 in the range of UAH 20,300-20,700/t (+2.5%), while on the CPT-enterprise basis – UAH 20,500-20,900/t (+2.5%). The rise in prices is supported by dynamics in the export markets of vegetable oils.

Dry weather conditions in South America led to lower forecasts for soybean production, which supports the price growth in this market segment. Amid the rising prices for soybean and palm oil, prices for sunflower oil continue to rise as well.

According to the results of the reporting period, sunflower oil of Ukrainian production on the FOB basis in the Black Sea ports again showed an increase in prices and reached $1,405-1,420/t (+1.8%).

Prices of soybeans in the domestic market during the reporting week continued to grow amid the weather situation in Brazil and Argentina. On an EXW basis, soybeans were traded in the range of UAH 16,600-17,000/t (+3.1%). On CPT-port terms, they occupied the price range of UAH 17,200-17,600/t (+2.4%). Rising prices encourage agricultural producers to intensify sales.

In the rapeseed segment, prices were mostly stable last week, holding high positions on both domestic and export bases. On FOB terms, they fluctuated between 765-775 $/t.


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