Palm oil beat down vegetable oil prices

December 8, 2017 |

In Germany, UFOP reports that palm oil prices weakened considerably over the past few weeks, pulling down vegetable oil prices as well. Pressure came from prices in Kuala Lumpur, where palm oil was recently traded at the lowest level since August 2016. Falling exports, sluggish demand, rising production and storage quantities, and also recent import duties levied in India caused prices to collapse and weighed down all vegetable oil prices.

In the case of sunflower oil, the large crop in the northern hemisphere caused additional negative pressure. Moreover, the firming euro made imports to Europe cheaper due to the favourable exchange rate. Rapeseed oil benefited from delayed but typical seasonal autumn demand from the biodiesel industry at the beginning of November, but was also affected by the downward pull from palm oil prices.

The same applies to soybean oil, which, however, increased in value at the beginning of October 2017, based on a significant rise in US domestic demand in the wake of the imposition of US import duties on biodiesel imports from Argentina. However, the stabilising effect on soybean oil prices failed to last, because the US Environmental Protection Agency (EPA) recently maintained the applicable volume of biodiesel for 2018 at 2.1 billion gallons (approximately 7 million tonnes). The quantities of biodiesel Argentina used to sell to the US are now looking for a new market, e.g. in the EU. In September, the EU Commission reduced anti-dumping duties, opening the way for this biodiesel export option.

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Category: Producer News

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