As oil prices surge, palm and soybean oil prices follow suit despite the lack of fundamental support. A 2.5% increase in oil prices this week bolstered palm oil and soybean oil, countering the prevailing market pressure stemming from heightened production and reduced exports.

In the Bursa Malaysia exchange, April palm oil futures experienced a three-day consecutive rise, jumping by 1.58% yesterday to  $824/t or €760/t, marking a 1.6% increase for the week. This stability has persisted for two weeks.

Export data from surveyors AmSpec Agri and Intertek Testing Services for February 1-25 revealed a decline in Malaysia's palm oil product exports by 11.8-14.3% compared to January figures, reaching 860-950 thousand tons. This downturn intensifies pricing pressure, particularly in anticipation of increased spring production.

Looking ahead, a significant industry conference scheduled for next week in Kuala Lumpur will unveil production and consumption forecasts for Malaysia and Indonesia until 2024.

Projections from the Indonesian Palm Oil Association (GAPKI) anticipate a 5% production increase in Indonesia by 2024, reaching 57.6 million tons. However, 2023 saw a 2.7% drop in palm oil exports from Indonesia compared to 2022, declining from 33.1 to 32.2 million tons, alongside reduced export earnings due to lower average prices.

The rise of biodiesel consumption is anticipated to outpace food consumption of palm oil in 2023, according to Indonesia's Ministry of Energy, with consumption expected to reach 12.5-13 million kiloliters in 2024.

At the Dalian Exchange, the most active soybean oil contract surged by 0.94% yesterday, while palm oil rose by 1.04%. Meanwhile, March soybean oil futures on the Chicago Stock Exchange witnessed a 2% increase to $989/t from Monday, despite a 1.5% monthly decline, influenced by lower soybean prices due to favorable weather conditions in South America.

 The influx of soybean and sunflower oil shipments from Argentina in March-April, coupled with the seasonal rise in palm oil offers, is expected to maintain low quotations.

This week, demand prices for sunflower oil deliveries dropped by another $5/t(€4,61)to $810/t(€747,46) with prices in Ukrainian ports sliding to $725-740/t(€669-682). Border closures with Poland have led to increased border queues, diminishing demand prices for oil deliveries to the EU via rail and road.

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