Palm and Sunflower Oil Prices Drop Slightly

The prices for palm and sunflower oils have seen a modest decline, attributed to a variety of market dynamics. With the rapeseed harvest commencing in Europe, there is a growing expectation of increased availability of new crop rapeseed oil. This anticipated supply has led to a reduced demand from European biodiesel producers, who had previously been purchasing soybean and sunflower oils from Ukraine in May. Consequently, this shift in demand has resulted in a decrease in prices.

Price Movements and Market Influences

Over the past week, the asking prices for soybean and sunflower oils from Ukraine have decreased by $20-30 per ton, settling at $900-920 per ton with delivery to Poland and Bulgaria. This reduction is also linked to the decline of the euro against the dollar. According to Trading Economics, the average price of sunflower oil delivered to buyers decreased by 1% over the week to $933 per ton, though it has seen a 7.2% increase over the month. Despite the price drop, the shortage of supplies from Ukraine continues to support the quotations.

Palm Oil Prices Under Pressure

In the past week, August futures for palm oil on the Bursa Malaysia exchange fell by 1.2%, reaching 3900 ringgits per ton or $828 per ton. This decline is largely due to a slowdown in export rates in June, following robust activity in May. Independent surveyors AmSpec Agri Malaysia and Intertek Testing Services reported that Malaysian palm oil product exports from June 1 to 20 fell by 8.1% to 12.9% compared to the same period in May.

Soybean Oil Prices Remain Steady

Soybean oil prices have remained relatively low, exerting additional pressure on overall vegetable oil quotations. On the Dalian exchange, soybean oil prices decreased by 0.99%, while palm oil prices fell by 0.78% at the end of the week. In contrast, July futures for soybean oil in Chicago rose by 1% over the week to $968 per ton, although they have declined by 2.4% for the month. This increase is supported by rising crude oil prices.

Impact of Rising Crude Oil Prices

August futures for Brent crude oil on the London ICE Futures exchange rose by 3.1% over the week to $85.2 per barrel, marking a 3.9% increase for the month. The rise in crude oil prices is fueled by heightened risks of a potential conflict between Israel and Lebanon. This upward trend in oil prices is expected to lend support to vegetable oil prices in the near future.

As global markets continue to fluctuate, the interplay between agricultural harvests, geopolitical tensions, and economic shifts will play a crucial role in determining future price trends. Stakeholders in the vegetable oil market will need to closely monitor these factors to navigate the ongoing changes effectively.