Palm Oil Decline Alters Global Dynamics

Malaysian palm oil prices have been dropping at an accelerated pace. February futures on the Bursa exchange recently fell by 1.2% to USD 1,07 per kg, marking a 7.6% drop for the week. The decline is largely due to reduced demand, particularly from India, which has increased purchases of cheaper soybean and sunflower oils.

Between December 1 and 15, Malaysia’s palm oil exports dropped by 6.7-9.8% to 660-671 thousand tonnes, according to estimates by ITS and AMSPEC. Meanwhile, India’s vegetable oil imports surged by 12% in November compared to October, setting a record of 1.628 million tonnes. Notably, sunflower oil imports increased by 43% to 341.9 thousand tonnes, while soybean oil imports rose by 20% to a three-month high of 410 thousand tonnes. Palm oil imports, however, grew by only 5% to 850 thousand tonnes.

Sunflower Oil Prices Under Pressure

India’s sunflower oil imports increased due to active supplies from the Russian Federation, where sellers reduced prices. Consequently, demand prices for CFR India fell to USD 1,18 per kg.

In the 2024/25 marketing year, Ukraine exported 1.5 million tonnes of sunflower oil. Monthly exports included 371.5 thousand tonnes in September, 484 thousand tonnes in October, and 481 thousand tonnes in November. However, in the first 12 days of December, exports dropped by 19% compared to the same period in November, totaling 165 thousand tonnes.

Demand prices for Ukrainian sunflower oil delivered to Black Sea ports fell to USD 1,09-1,10 per kg, while deliveries to Poland or Bulgaria are priced at USD 1,15 per kg. Despite rising rapeseed and rapeseed oil prices in the EU, European buyers are hesitant to purchase Ukrainian sunflower oil due to significant stockpiles.

According to Trading Economics, the average price of sunflower oil delivered to customers decreased by 1.8% to USD 1,28 per kg over the week, reflecting a 3.5% drop for the month.

Impact on Sunflower Seeds and Meal

Sunflower seed prices with 50% oil content fell to USD 0,25-0,26 per kg, influenced by declining oil prices. However, processors are willing to offer premiums for larger batches.

Rising feed corn and wheat prices have supported sunflower meal prices, which increased by USD 0,005-0,008 per kg to USD 0,195-0,20 per kg at ports. This rise will improve processing margins and potentially stabilize sunflower prices.

Soybean and Palm Oil Markets in Focus

January soybean oil futures on the Chicago Board of Trade fell by 2.1% to USD 0,92 per kg, marking a 2.6% weekly decline and a 9.1% drop for the month, driven by forecasts of increased global soybean production.

The Malaysian Palm Oil Board estimates that the country’s palm oil production will decline for the fourth consecutive month in December due to heavy rains delaying the harvest. This production reduction may soon halt the decline in palm oil prices. However, sunflower oil prices remain under pressure from increasing supplies of low-cost soybean oil from South America and the USA.





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