June 2024 Outlook Report: Oils

- Key Indicators: The World Bank fertilizer index fell 5.35 points in May-24, decreasing 4.7% MoM. The May-24 decrease in the fertilizer index is largely the result of lower nitrogen-based fertilizer prices coupled with minor decreases in phosphate prices. Global freight prices jumped 27.42% in May-24 to USD 3,089.22. This increase results from unseasonal increases in demand for ocean freight out of Asia. In May-24, The FAO Vegetable Oil Price Index averaged 127.8 points, a 3.1 point (2.4%) decrease from Apr-23, but still 7.7% higher compared to May-23.

- Soybean Oil: Since its peak of USD 1,662/mt in Jul-23, US soybean oil prices have been on a consistent downward trend, dipping below the USD 1,000 mark in May-24 to trade at USD 958/mt. Argentine soybean oil prices dropped more than USD 100/mt in May-24 to USD 823/mt, making it the most affordable soybean oil on the market from major producing countries. Brazilian soybean oil prices dropped almost USD 100/mt to USD 844/mt in May-24. These price drops are largely the result of large soybean harvests expected in South America as well as the US.

- Palm Oil: Indonesian palm oil prices dropped more than USD 100/mt in May-24 to USD 900/mt. This price drop is largely the result of high palm oil production levels expected in 2024, weak international demand as well as the acceleration of the 2024 production cycle. Malaysian palm oil prices dropped a staggering USD 140/mt in May-24 to USD 855/mt, largely due to increasing seasonal production and increasing stock levels. This price drop puts Malaysian palm oil prices on par with Ukrainian and Russian sunflower oil and only at a slight premium compared to soybean oil prices in South America.

- Sunflower Oil: Ukrainian sunflower oil prices rose sharply in Apr-24 to USD 845/mt and jumped further to USD 871/mt in May-24. The May-24 price increase was driven by sustained international demand, low stock levels at processors, limited supply, and a weaker Ukrainian hryvnia against the US dollar. Russian sunflower oil prices rose sharply to USD 839/mt in Apr-24 and even further to USD 855/mt in May-24. The recent increase in Russian sunflower oil prices is largely the result of lower YoY harvest coupled with high international demand.