Головна Analytics Oilseed market reviews Oilseeds and processed products market (29.11.21‒03.12.21)

Oilseeds and processed products market (29.11.21‒03.12.21)

The global palm oil market will largely bounce back next year. According to analysts from India’s Godrej International Limited, in Malaysia, the problem of labor shortages caused by the Covid-19 pandemic will be resolved in early 2022. As a result, crude palm oil production is projected to grow from 18 million in 2021 to 19 million tons during 2022. Oil production in Indonesia is also expected to increase by 1 million tons. A noticeable resumption of production will come in the second quarter of the year.

Border closures and a ban on the entry of migrants last year contributed to severe labor shortages on plantations in Malaysia and Indonesia, where 78% of workers came from countries such as Indonesia, India and Bangladesh. FGV Holdings, a major palm oil producer in Malaysia, which now has 72% of the workforce required for optimal capacity, told Reuters that the first batch of 7,000 workers to be hired will arrive by the end of the first quarter of 2022.

  • After a decline in soybean prices at CBOT in the middle of the week due to concerns about a new variant of the coronavirus, Chinese importers contracted several cargo of soybeans with deliveries in December-January. According to information from market operators, importers purchased 240 thousand tons of soybeans originating from the USA and Brazil;
  • The FAO Vegetable Oil Price Index averaged 184.6 points in November, slightly below the all-time high recorded last month. The slight decline was attributed to lower quotes for soybean and rapeseed oil, while palm oil was virtually unchanged;
  • Oil World analysts in a fresh report raised the forecast for global soybean oil production in 2021/22 MY to 61.9 million tons compared to 61.54 million in the previous forecast, which is also 4% higher than in the previous season (59.3 million tons). Prognosis is set to rise as production increases in the US, China, Brazil and Argentina;
  • According to Oil World analysts, canola production in Australia in 2021/22 MY may turn out to be higher than previous forecasts supposed. It was increased by 0.4 million to a record 5.7 million tons, which is also 1.2 million tons higher than the result of the previous season.

According to our price monitoring data, during the reporting period, multidirectional price trends were recorded on the domestic markets for key oilseeds and their by-products. In the sunflower segment during the reporting week, prices dropped significantly. On the EXW basis, sunflower seeds were traded within the range of 19000-19400 UAH/t (-2%), while on the CPT enterprise within 19200-19600 UAH/t (-2%). Sunflower prices in Ukraine are falling in line with the decline in world prices for vegetable oils and the collapse of crude oil quotes.

So, on the FOB basis in the Black Sea ports, Ukrainian-made sunflower oil was traded in the range of 1360-1380 $/t by the end of the week. The decline in prices was simultaneously limited by the still low volumes of raw oil on the domestic market, which is associated with the restraint of seed sales by agricultural producers.

According to the relevant ministry, in Ukraine, from 6.476 million hectares or 99% of the planned area, 16.2 million tons of sunflower were harvested with an average yield of 2.5 t/ha. According to the State Statistics Service of Ukraine, as of November 1, sunflower stocks in our country increased compared to last year by 1.519 million to 8.761 million tons, and soybeans – by 369.8 thousand to 1.76 million tons. At the same time, rapeseed stocks decreased by 200.7 thousand – to 205.6 thousand tons.

Prices of soybeans on the Ukrainian domestic market, in contrast to the previous week, have significantly increased. On the EXW basis, they were traded within the range of 15200-15600 UAH/t (+ 2.7%). On the terms of the CPT enterprise, beans occupied the price range of 16000-16400 UAH/t (+ 2.5%). In the rapeseed segment, prices last week were mostly stable, holding high positions both on domestic and export bases. So, on FOB terms, prices fluctuated in the range of 760-775 $/t.


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