GASC tender results underpin wider vegetable oil market dynamics
On 16th August 2023, Egypt's General Authority for Supply Commodities (GASC) made a significant move by purchasing 39,500 tonnes of sunflower oil at $990 per metric tonne on a Cost and Freight (C&F) basis. This transaction marked a notable departure from the preceding tender on 26th July, during which GASC paid $1,080 per metric tonne for 33,000 metric tonnes.
The discount of $90 per metric tonne in this recent deal likely mirrors a shift in demand and the anticipation of ample supply availability. Market players have commented to Mintec that they foresee ample sunflower production, with the EU expected to produce 10 million metric tonnes, representing a 1 million tonne increase from the previous year. Similarly, Ukraine's potential output could reach 14-14.5 million tonnes, up by 2 million metric tonnes, while Russia's estimates fall within 16.5-17.5 million metric tonnes. With increased production across key sources and existing substantial stockpiles, the market seems to have far more supply than current demand is able or willing to draw down, potentially adding continued downward price pressure to the sunflower seed and oil market.
The implications of Egypt's recent tender outcome are far-reaching, hinting at an ongoing rebalancing of the vegetable oil market following the initial upheaval caused by the Ukraine conflict. Notably, even recent attacks on Ukrainian ports, as reported by Mintec here, have had a limited impact on pricing, thanks to the buffer of available supply.
Get Whitepaper
