In September 2022, the Mintec Category Index for EU vegetable oils declined for the fourth consecutive month, down by 3.7% month-on-month (m-o-m), to EUR 1,161/MT. The decline was primarily attributable to expectations of improvements in the global vegetable oil supply for the 2022 marketing year (MY). The index remained up by 12.4% year-on-year (y-o-y), supported by elevated input and logistical costs.
However, prices of most oils have begun to move up in October, due to various factors. The Russia-Ukraine war has continued to support prices. Lower sunflower and rapeseed crop estimates from Ukraine for the 2022/23 MY, coupled with recent reports of risks to the grain corridor deal not being extended beyond 19th November, created a bullish market sentiment. Additionally, news that the Organization of the Petroleum Exporting Countries (OPEC) intends to cut crude oil production by two million barrels per day, starting in November, contributed to the sentiment, as this could mean increased reliance on vegetable oil feedstocks for biodiesel. Consequently, the Mintec Benchmark Prices for Rapeseed Oil FOB Rotterdam increased by 6.9% in the last two weeks, to EUR 1,406/MT, on 12th October. Also, the MBP for Sunflower oil FOB Northwest Europe (6 ports option) Rotterdam was up by 7.4% m-o-m to EUR 1,212/MT on the same day.
Despite increased buying activity for palm oil, due to its comparatively lower price to alternative vegetable oils, prices have continued to decline. The MBP for Crude Palm Oil CIF Rotterdam was assessed at EUR 954/MT, down by 13.7% m-o-m on 12th October. Expectations are for increased demand from China and India (top edible oil importers) in the coming months, as festive seasons approach, which is likely to provide support for prices in the short term as Indonesia’s palm oil supply diminishes.