Sunflower oil price rises to highest point in years

The market for vegetable oils is not exactly straightforward. Sunflower oil reaches the highest level in years. Other products such as rapeseed and soybeans are recovering somewhat after a dip around the turn of the year. However, markets remain volatile, due in part to geopolitical tensions and uncertainty regarding global demand. Palm oil has found its way back up this week. In Malaysia, the futures market rose by 1.4% to 4,091 ringgit (equivalent to about €864) per tonne. The rebound follows new figures from the Malaysian Palm Oil Board (MPOB), which show that production in December fell by 5.5% compared to the previous month to 1.83 million tonnes. This increases concerns about availability. On the demand side, more positive signals are emerging. Malaysian exports increased by 8.5% in December, and at the beginning of January, the export pace was even more than 29% higher than in the same period a month earlier. Especially India, the largest importer of vegetable oils in the world, seems to be more active again after a quiet December. The upside is somewhat limited by a stronger ringgit and lower prices for edible oils in China. Indonesian policy also plays a role in the background. Jakarta is considering raising the export duty on palm oil to finance the biodiesel programs B40 (and possibly B50, with 50% palm oil). This provides support for the market. Sunflower oil reaches highest level in years Sunflower oil is among the strongest gainers in the vegetable oil complex. The futures market rose towards 1,466 rupees per 10 kilos (equivalent to about €1,392 per tonne), the highest level in over three years. The reason for this mainly lies in a very limited supply from the Black Sea region. Smaller harvests in Ukraine and Russia, combined with logistical problems and ongoing attacks on ports and infrastructure, are pushing the sunflower oil price up. Meanwhile, demand remains robust from both the food industry and the biofuel sector. Although additional production in the EU and South America provides some counterbalance, it is not enough to close the gap. Rapeseed shows cautious recovery Rapeseed is not breaking records. After a few weak weeks, rapeseed touched €470 per tonne at Matif. The price is clearly below the level of a year ago. The pressure mainly comes from ample global stocks and moderate demand from the animal feed sector. The market seems to have reached a temporary low. In Canada, rapeseed is showing a similar movement. The Canadian futures market recovered to 623.70 Canadian dollars per tonne. The demand for rapeseed from Canadian processors is relatively good. The trade relationship with China remains an uncertain factor for Canadian exporters. Rapeseed has faced import restrictions from China in response to Canadian tariffs on Chinese electric cars. Soybeans hold steady due to Chinese demand Soybeans closed last week at $10.40½ per bushel, keeping the price close to the high levels since the end of last year. Soybean oil remains relatively stable. The market is supported by ongoing Chinese purchases of American soybeans. Beijing has already purchased nearly 11 million tonnes of soybeans from the U.S. This is close to the 12 million that Trump claims to have negotiated. At the same time, a stronger oil price provides additional support. Higher energy prices make soybean oil more attractive for biodiesel, which translates into the soybean price through margins. China also plays a dual role. In addition to imports, state-owned enterprise Sinograin announced it would auction 1.1 million tonnes of soybeans from state reserves. This could put some pressure on the domestic market in the short term.