Головна Analytics Oilseed market reviews Oilseeds and processed products market (31.01.22‒04.02.22)

Oilseeds and processed products market (31.01.22‒04.02.22)

  • The FAO Food Price Index averaged 135.7 points in January 2022, up 1.5 points (1.1 percent) from December 2021. The increase in the index in January was due to the growth in sub-indices for vegetable oil and dairy products, which was partially offset by a decrease in sugar prices. Meat and grain price sub-indices remained virtually unchanged;
  • Oil World experts predict a sharp decline in oil imports to Turkey in March-September 2022 – to 270-300 thousand tons, which will significantly yield to the figure for the same period a year earlier (416 thousand tons);
  • Analysts of the International Grain Council predict a record gross harvest of rapeseed in 2022/23 MY. Historically high prices and demand give reason to expect an expansion of the world’s acreage to a record 40 million hectares, and, accordingly, a record harvest. IGC expects the largest growth in rapeseed production in Canada and the EU. In Ukraine, the area under rapeseed will increase to 1.1 million hectares;
  • According to analysts of the National Association of Grain Exporters of Brazil, 2.42 million tons of soybeans were exported from the country in January, which significantly exceeds the figure for the same month a year earlier (53.64 thousand tons). The main direction of export is China;

Palm oil continues to trade at recent highs amid uncertainty about the future of its exports. Recall that the Indonesian government recently decided to send 20% of the volume of palm oil, previously intended for delivery to foreign markets, to be sold on the domestic market.

As a result, palm oil, which has traditionally been the cheapest among the main vegetable oils, is now trading at the level of soybean and sunflower oil.

Amid significant changes taking place in the palm oil market, India, the world’s largest importer and consumer of vegetable oils, is increasing the share of sunflower and soybean oil in its imports, while the share of palm is declining.

According to S&P Global Platts, India increased its imports of vegetable oils in January compared to December by 6% to 1.3 million tons. And if in 2020/21 MY global palm oil imports accounted for 63% of Indian imports, then in January 2022 this figure dipped to 42%.

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. Despite the fact that sunflower oil continues to rise in price on export bases, prices for sunflower seeds did not show a corresponding movement at the end of the reporting week. On the basis of EXW, sunflower was traded within 20300-20700 UAH/t, while on the terms of the CPT-enterprise – 20500-20900 UAH/t.

Thus, the growth in prices for raw oil is hampered by a reduction in demand from processors, who expect prices to decline after a long period of their growth, including taking into account that agricultural producers will soon need to replenish liquid funds on the eve of the start of spring field work.

As mentioned earlier, Ukrainian-produced sunflower oil on an FOB basis in the Black Sea ports, following the results of the reporting period, again showed an increase in prices and reached $1,420-1,435/t (+1.1%).

Prices of soybeans in the domestic market during the reporting week continued to grow amid harsh weather situation in Brazil and Argentina. On EXW basis, beans were traded in the range of UAH 17,200-17,600/t (+3.6%). On CPT-port terms, they occupied the price range of UAH 17,500-18,000/t (+2.0%). 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. So, on FOB terms, they fluctuated in the range of $765-775/t.


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