August 2024 Outlook Report: Oils

- Key Indicators: The Freightos Baltic Index (FBX) averaged USD 5,081.75 in Jul-24, an 18.69% increase from USD 4,281.67 in Jun-24. The World Bank’s fertilizer index rebounded, rising for the second consecutive month, increasing by 10.96% from 108.45 points in May-24 to 129.34 points in Jul-24. The 1.81% MoM increase observed in Jul-24 was primarily driven by a 1.86% rise in urea prices, which more than offset the declines in potassium chloride (-3.02% MoM) and diammonium phosphate (DAP, -0.66% MoM). In Jul-24, the FAO Vegetable Oil Price Index averaged 135 points, a 2.43% increase from the 131.8 points recorded in Jun-24.

- Soybean Oil: The US is expected to become a net exporter in 2024/25, with production reaching a record high and prices forecasted to decline. Meanwhile, Argentina's soybean oil prices dropped to USD 945/mt, reflecting a 0.63% MoM decrease and a 5.5% YoY drop amid global supply surpluses and local policy changes.

- Palm Oil: In Jul-24, Malaysia's palm oil exports rose by 23% to 31% MoM, reaching about 1.6 mmt, with trade deals securing over USD 49 million in China. Exports to India are forecasted to increase, supporting Malaysia's role as a major supplier. Palm oil prices rose to USD 885/mt, a 1.84% MoM increase, and are forecasted to rise further in H2 2024 due to potential La Niña-induced disruptions. Benchmark futures are projected to reach USD 853.37 to 896.04/mt by year-end, marking the first annual gain since 2021.

- Sunflower Oil: Despite logistical and power issues, Ukraine's sunflower oil exports increased 20% YoY to 4.6 mmt in Jul-24. Prices fell to USD 930/mt, down 1.69% MoM but up 3.76% YoY due to poor harvest forecasts. In Russia, sunflower oil production is set to rise by 16 to 17% YoY, with prices dropping to USD 921/mt in Jul-24, down 1.60% MoM but up 4.18% YoY. In the EU, sunflower oil prices climbed to USD 1,090/mt, up 4.50% MoM and 2.73% YoY, driven by reduced production and low stocks.