End of October

Dear Ladies and Gentlemen,

The vegetable oil market remains highly volatile, compounded by an upcoming holiday season. Diwali is celebrated in India this week, Christmas preparations are underway in Europe, and the Chinese New Year follows on January 28. With all that, buyers are actively securing volumes for holiday arrivals, maintaining market strength.

Sunflower Oil and Seeds

This year’s Summer heat impacted Ukraine’s sunflower yields, with an expected year-on-year decrease of 17% totaling the harvest at 12.1M tonnes. Meanwhile, the country’s extraction capacity is about to reach a record 20M tonnes in 2025, creating an 8-million-tonne gap between processing capacity and available crops. Local crushers are raising seed prices, further reinforced by Ukrainian farmers withholding sales.

CSFO prices remain robust, with CPT at $1,100 and RBD oil at $1,250 PMT. Increased domestic consumption of RBD oil in Ukraine will likely reduce export volumes, while electricity and gas supply issues add further strain on the market. With refining capacity utilization behind crushing capacity, refining costs are around $120 + 3% losses.

Bottle oil reaches $1.30 FCA. Seed prices are expected to cross ₴30,000 PMT by December, with current offers at ₴26,000–27,000.

In Russia, the sunflower harvest was revised up by the USDA to 16.2 million tonnes, while Rosstat reported a 2023 yield of 16.7 million tonnes, slightly above last year. However, the crop quality is poor, and prices have surged. In the south, sunflower seed prices rose sharply from ~ ₽29,000 per ton in September to ₽44,000 by mid-October.

Processing margins are expected to turn negative in November (-2%), December (-7%), and January (-12%). Many small and medium processing plants may shut down due to pricier raw materials, as large players scale back operations or delay launching new facilities.

Additionally, the sunflower oil export duty in Russia will increase to ₽2,900rubles for the first time since June 2023, potentially reducing export volumes.

Soybean Oil and Soybeans

China’s demand for CSFO and rapeseed from Russia and Kazakhstan remains strong, with Kazakhstan increasing sunflower oil exports by 43% in 2023/24 MY.

Soybean imports to China gained 59% year-on-year in September, reaching 11M tonnes, with total imports up 8% year-to-year. Soybean oil remains highly attractive, trading at $1,095–1,096 per tonne for India.

EU soy oil prices have stabilized, while Black Sea offers for CDSBO hover at $950–$980 for December-January.

Ukraine and Russia are expected to increase soybean oil volumes due to good crops, with a combined production of over 12Mtonnes. Ukraine’s primary challenge will be soy meal exports, as protein levels remain low this season.

Rapeseed Oil

EU rapeseed imports in 2024/2025 are higher than last year, while rapeseed oil imports are lower, offset by increased rapeseed crushing. Imports currently stand at 1.69M tonnes.

As of October 20, the EU’s soybean imports for 2024/2025 are ~ 3.73M tonnes (up 7% in a year), yet Ukraine’s prices remain challenging for the EU market.

Palm Oil

The palm oil market has upside potential due to weak production and low stock levels in both Malaysia (KLC) and Indonesia. Indonesia’s recent approval of a 40% biodiesel blending mandate is expected to bolster demand, potentially pushing KLC prices over RM 5000.

Market Outlook

The current season is exceptionally volatile, with geopolitical issues such as the U.S. elections, the Israel-Iran conflict, and the war in Ukraine adding to demand pressures across food and biofuel markets. With uncertain weather conditions affecting EU crops and increasing demand, strong prices will likely persist.

A challenging situation, but we hope for the best.