Early June

Dear Ladies and Gentleman 

I was honored to attend the Malaysian Palm Conference held on May 26 in Cairo. The event brought together experts from Egypt's oil, dairy, and confectionery sectors. In 2023, the country's major oils and fats consumption trends saw imports of 1.02M MT of palm oil, 327k MT of soybean oil, and 293k MT of sunflower oil. 

Palm oil is primarily imported in bulk to the Red Sea ports, with the current import price of RBD olein to Egypt at $920+ per MT. Egypt currently became a destination for oil exports at the end of May and the start of June, with high stock levels of sunflower oil import before Ramadan and local crushed soy bean oil . 

Egypt, India, Turkey, and other destinations become viable alternatives during market rallies in origination.

Ukraine's RBD SFO FCA price has surpassed $1,000, while the CSFO ex-works price has crossed $900. CPT buying bids have reached $890, but proper offers are yet to be seen. Mersin has offered Ukraine at $970, while Turkish bids are at $870 and Chinese $980, respectively. India's offers have also exceeded $1,000 for Ukraine origin, although no sales were recorded. Ukraine's price remains firm as farmers have stopped selling, predicting a future price increase.

Last season rapeseed crush in Ukraine is expected to beat last year's record of 1M+ tons, of which over 500k MT of oil was exported . Ukraine's SFO stock contracted since export in May reached 620k MT . However, exports may slow down in July-August, leading to a potential future price increase. By the end of this week or the start of the next one, purchase prices are expected to reach UAH19k per ton for sunflower seeds. 

Currently, EU buyers pay high prices due to the time between the new crop and anticipated bullish weather conditions that may affect this year's EU rapeseed crop. Canola's price will also be supported by the EU's decision on duties for canola, rapeseed, soy, and sunflower new duty structure for Russia and Belorussian origin veg oil and veg meal .

Russia's market is also in an uptrend, possibly taking advantage of the situation in Ukraine. 

Returning to the topic of palm oil and the EGY conference, palm oil looks stable, with over 50% of CPO and 70% of PKO used in Indonesia. The country's local demand is growing, particularly for biodiesel, indicating potential volume growth. Oil stocks provide stability and no rush for liquidation. Supply and geopolitical tensions are the two main factors determining the prices for the rest of 2024, with Malaysia experiencing its peak production cycle and facing pricing pressures as a result till September .

The forecast for India's vegetable oil import in 2023-2024 is 15.05M MT – 9% lower YoY. The situation with China's appetite for vegetable oils, as well as the political dynamics between the USA and China, leaves a significant question mark. It is difficult to conclude right now, but it seems that we may witness a very complex and interesting new season.