Decreased Palm Oil Demand Due to Lower Prices of Soyoil and Sunflower Oil

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Decreased Palm Oil Demand Due to Lower Prices of Soyoil and Sunflower Oil. Photo by: Palmoilmagazine

PALMOILMAGAZINE, KUALA LUMPUR – The surge in soyoil and sunflower oil stocks, known as ‘soft oils’, has put a check on the rising prices of crude palm oil (CPO). This marks the first time in the past year that these alternatives have been cheaper than palm oil.

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The price of CPO at the Malaysia Derivatives Exchange saw a nearly 5% increase in early 2024, following an 11% decline the previous year. However, the abundant production of soyoil in South America has contributed to a slight slowdown in palm oil demand.

Traditionally, soyoil, as a primary vegetable oil, tends to be more expensive than CPO. However, a record-high harvest of soyoil in South America has led to a decrease in its price, making it more appealing to buyers and consequently boosting its demand. This dynamic, where CPO production decreases while ‘soft oil’ production increases, has led to a price trade difference that hampers the potential increase in CPO prices.

Also Read: CPO Prices Depressed by Weakening Prices of Other Vegetable Oils

CEO Glentech Group, Vipin Gupta thought the increasing ‘soft oil’ price would tend to alienate CPO buyers which in the end would potentially escalate CPO price. Gupta also told CPO imports were offered about US$ 930 per metric ton in India for March 2024 delivery, while soyoil and sunflower oil were offered about US$ 915 and US$ 910 per ton.

As Palmoilmagazine.com quoted from moneycontrol.com, India, as one biggest vegetable oil importer country, has shifted to get oil purchase preference.

CEO Patanjali Foods Ltd, Sanjeev Asthana told, many buyers in India reduced CPO imports but escalated soyoil delivery. CPO imports in India decreased to the lowest numbers in the past three months while soyoil imports could significantly increase for the next couple of months.

Managing Partner of GGN Research, Rajesh Patel told that India normally purchased palm oil from India, Malaysia, and Thailand while soyoil and sunflower oil were imported from Argentina, Brazil, Russia, and Ukraine.

In Europe, CPO price got more expensive for buyers because more expensive transportation. This made CPO got more expensive up to US$ 100 per ton than soyoil, canola oil, and sunflower oil. (T2)

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