Prices for Vegetable Oils Rise: What is Happening in Global and Ukrainian Markets

Global prices for vegetable oils continue to rise amid a sharp increase in oil prices and escalating tensions in the Middle East. At the same time, in Ukraine, purchasing prices remain under pressure due to weak demand, problems with maritime exports, and buyer caution, as they anticipate a decrease in product prices after the new harvest.

This is reported by Delo.ua, citing a message from the "Grain Exchange."

Global prices for vegetable oils continue to rise due to the increase in oil prices; however, the physical market remains restrained due to weak buyer demand. In Ukraine, the situation is further complicated by problems with maritime exports caused by Russian shelling of port infrastructure.

The rise in oil prices has been one of the key factors supporting the vegetable oil market. The escalation of the situation in the Strait of Hormuz, Iran's attacks on shipping, and the resumption of U.S. strikes on Iranian military facilities have led to a significant spike in oil prices. Over the past two weeks, Brent crude oil futures have risen by 22%, and just in the last week, by 7% to $91 per barrel. This has stimulated demand for biofuels and supported prices for vegetable oils.

At the same time, the Ukrainian market is under pressure due to the near-total cessation of maritime exports. Due to constant Russian attacks on Black Sea ports and threats to civilian shipping, shipowners are avoiding routes to Ukrainian ports. As a result, exports are practically paralyzed, which contributes to rising global prices but simultaneously puts pressure on domestic purchasing prices in Ukraine.

The rapeseed market has reacted the most to the situation. Exchange quotes in Paris have risen by almost 8% over two weeks, and prices for rapeseed oil in Europe have increased to $1570–1575 per ton FOB Netherlands.

Analysts predict that due to the reduction in exports, domestic processing of rapeseed in Ukraine will increase, as well as the export of Ukrainian rapeseed oil to EU countries via land routes. Demand from China remains limited as the country actively increases purchases of rapeseed oil from Russia.

The soybean oil market is also showing positive dynamics. December futures in Chicago gained more than 1% over the week, supported by rising oil prices and increased purchases of American soy by China. Soybean oil prices have also risen in Brazil and the Chinese market.

At the same time, palm oil is rising much more slowly. On the Bursa Malaysia exchange, its quotes increased by less than 1% over the week, which is explained by weak demand from India, which is actively processing its own harvest.

The sunflower oil market is also experiencing an uneven situation. In India, prices for imported products have slightly increased due to reduced supplies from Ukraine and Russia. At the same time, Russian exporters are actively selling off stocks of the old harvest, anticipating a record sunflower harvest in the fall, which could lead to further price declines.

In Ukraine, purchases of sunflower oil with delivery to Black Sea ports have effectively been suspended due to security concerns. Meanwhile, in the Danube ports, offers for sale are recorded at a price of $1380–1385 per ton on FOB terms.

Experts note that a good harvest of rapeseed and sunflower in Ukraine, EU countries, and Russia in the coming months will increase the supply of vegetable oils in the global market. Therefore, buyers are currently hesitant to conclude large contracts, waiting for a possible price decrease in case of stabilization in the oil market and a potential ceasefire between the U.S. and Iran.

It is worth noting that the demand for sunflower oil is rapidly growing worldwide, as buyers are increasingly turning away from expensive palm oil. However, for Ukrainian factories, this boom has become a challenge: due to fierce competition from other countries, the profits of our processors have begun to decline.

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