Early February

Hello everyone,

Some fresh updates from the veg oil market:

Rapeseed

From July 1 to December 31, 2024, Ukraine exported almost 2.8M metric tons of rapeseed (up 4% from the previous season). Amid declining stocks, traders who had purchased rapeseed in Black Sea ports finalized their export programs in January, dropping bid prices from UAH 25,500-26,000 ($615-627) to UAH 23,500-24,000 ($567-579) per metric ton.

With EU as the primary export destination, exports to the Far East are almost nonexistent this season. The high cost of seeds and an open export market have resulted in a limited rapeseed crush. Meanwhile, Western Australian canola bids gained $10-15, reaching $509 FIS for the current crop and $500 for the new crop.

Soybean

Ukraine’s domestic soybean market is seeing record crush levels, with prices gradually rising over the past week (by UAH 100-300 per metric ton, depending on the location). Export prices for soybeans also saw a moderate rise of UAH 100-200 ($2-5) per tonne, reaching UAH 17,900-18,500 ($385-393) CPT-port. Supply remains limited overall.

Soybean oil prices remain firm at $1,000 EXW due to slow production, with sellers awaiting market corrections. Russia's SBO price offers stand at $950 CPT port, while RBD SBO is offered at $1,220-1,250 GCC ports, marking a $100 discount compared to RBD SFO. Improved weather in Argentina has stabilizing crop prospects but pressured prices, with FOB Argentina now at $980.

Argentina and Brazil Developments

Argentina implemented tax cuts on agro commodities, reducing export taxes:

• Soybean – from 33% to 26%,

• Processed soy from 31% to 24.5%,

• Corn and wheat from 12% to 9.5%.

However, farmers report that local price increases do not fully reflect these tax cuts. The Rosario grains exchange indicates that soybean prices rose from ARS 295,500 ($280) to ~ ARS 315,000 ($299), but trading volumes remain low.

Meanwhile, Rabobank predicts a record soybean harvest for the 2024/25 season, estimating production at 170M metric tons – 15M tons more than the previous season, which suffered from adverse weather.

Brazil considersincreasing the ethanol blend in petrol from 40% to 50%, but SBO’s future hinges on U.S. political decisions regarding tariffs on Mexico, Canada, and China. Currently, 46% of U.S. agricultural exports go to these three markets. Additionally, rumors suggest India may raise duties on vegetable oil, though no details have emerged yet.

Global Outlook

In January 2025, India’s edible oil imports fell to 1M metric tons, a 16% drop in a month and the lowest in almost a year. Market volatility is expected to persist, influenced by a strengthening U.S. dollar, rising energy costs, and high interest rates in Russia and Ukraine. Freight costs for Ukrainian container shipments have returned to near previous levels, approaching $100 PMT from Odessa to Jebel Ali (flex included), with a transit time of over 30 days.

The edible oil market remains highly reactive to news and economic trends, with factors such as global policy decisions, energy prices, and currency fluctuations shaping market dynamics.