A global market of vegetable oils is facing a sharp price increase supported by the appreciation of crude oil prices among other factors. One of the features of the current season is that the upward trend of vegetable oils prices is untypically much stronger compared to the growth of crude oil prices, declared David Jackson, Director of LMC International within Asia Grains&Oils Conference in Qazaqstan organized by APK-Inform on November 17-18.
“There is a number of factors supporting vegetable oils prices except the appreciation of crude oil prices. Palm oil production in lower compared to the last year in Malaysia. We expect it to continue through the end of the year. Indonesia slows down palm oil output. Canola crop declined by more than 30% in Canada this year, and the oil content is low. Thus, the processing of canola is declining and will be low this season”, – the expert explained.
Additionally, D. Jackson focused on the significant influence of the growing demand for vegetable oils on the market of biofuels that strongly supports the prices of oils.
“A number of countries like USA, EU, Indonesia, Malaysia, etc. are developing the biodiesel industry and building new facilities. It fuels the demand for oils. We expect further development of the segment in the coming years that will keep the demand for vegetable oils and prices high”, – the expert said.
Speaking about the prices, D. Jackson said that the prices might decline slightly in the short-term under the pressure of massive crops of soybean and sunflower seed in the world. However, the low production of rapeseed and palm oil as well as biodiesel support will not let the prices to decline sizably.
“As to the sunflower oil market, the prices will be very competitive this season due to high sunflower seed crop in the key countries. We expect strong import of sunflower oil to India this season. Sunflower oil will be competitive on the Indian market compared to soybean oil, while rapeseed oil will not find the demand here on too high prices”, – D. Jackson summarized.
