Late October

Hello, community!

Please enjoy a fresh overview of the food oil market.

Sunflower Oil and Seeds

Ukrainian farmers are nearing the end of the sunflower harvest, with ~92% of the cultivated area completed. About 9.28 million tonnes have been harvested from 4.51 million hectares. Despite this, farmers withhold sales due to negative margins, and many crushing facilities are expected to suspend operations post-harvest. Next year, the sunflower planting area in Ukraine may decrease.

Safety concerns are impacting operations. Following an attack on a CMA container vessel, major shipping companies like MSC and Maersk have suspended operations in Odessa. This resulted in container stockpiles, with current transit limited to road routes or railways to Gdansk.

HOSO seeds are trading at a premium of $35–$40 per metric ton, while the oil spread has reached $300 PMT.

Russia’s oilseed production declined this year, especially in the Rostov region – a key sunflower-growing area. Like that, yields fell from 23 centners/hectare in 2023 to just 15 c/ha in 2024. The market is preparing for the potential reintroduction of export duties on sunflower oil in November.

Palm Oil Market and Trends

Palm oil prices have been lowering since 2019, with limited stock availability due to bad weather and a production decline of 3.7 million tonnes. Despite this, palm oil remains the price leader in the vegetable oil market, influencing soy and canola oil.

Meanwhile, Indonesia is pushing ahead with a plan to increase biodiesel content to +40, which could further impact palm oil supply and demand. And the upcoming Ramadan is expected to drive high consumption, further tightening the market.

The European Union is also set to prohibit palm oil imports after the New Year as part of an anti-deforestation program, posing challenges for food applications that are difficult to replace.

Soybean and Soy Oil

Soybean remains a dominant crop and an increased crushing activity is expected globally. Current FOB prices for soybean meal in the Black Sea region are ~$360 for 42% protein content, while soy oil is offered at $1,000 FCA. Argentina’s FOB prices are at $1,049.

Meanwhile, we may see soybean meal FOB prices drop to $300 or lower by 2025.

Egypt’s recent purchase of 50,000 tonnes of sunflower oil on October 15 underscores the ongoing demand, while the local soy oil price stands at $1,300 FCA.

Rapeseed Oil

The trade dispute between Canada and China has generated some demand for rapeseed oil from China, leading to an increase in prices.

Olive Oil

Spain’s olive oil production has suffered from a drought for two years, cutting production in half. Prices skyrocketed from €3,000 to €10,000 per metric ton but have recently corrected to ~ €7,000 for standard olive oil and €3,000 or lower for pomace oil.

The new harvest is starting, and market dynamics are expected to shift as fresh supplies become available.

Biodiesel and Biofuel Demand

Approximately 20% of global vegetable oil consumption is attributed to biodiesel, with a year-on-year increase of 4.55%. The trend toward biofuel is a significant factor in the bullish price scenario for vegetable oils, especially if current dynamics persist.

Summing Up

Overall, the vegetable oil market is experiencing tight supply and increased consumption. Geopolitical tensions, adverse weather conditions, and policy changes are shaping market trends across various oilseed commodities, including sunflower, soy, palm, and olive oil.

These are all of the news for now. I hope you have found it useful and, as always, will be glad to respond to any of your comments or questions.

Take care!