March 2025 Outlook Report: Oils

- Key Indicators: Global freight prices averaged USD 3,129.10 per 40-foot container in Feb-25, marking a 20.69% month-on-month (MoM) drop and a 7.70% year-on-year (YoY) decrease. This decline is attributed to the post-Lunar New Year (LNY) slowdown. Meanwhile, the World Bank's Fertilizer Index averaged 133.47 points in Feb-25, marking a 7.39% MoM increase and a 13.11% YoY rise, driven by higher prices for urea, diammonium phosphate (DAP), and potassium chloride. The Food and Agriculture Organization (FAO) Vegetable Oil Price Index averaged 156 points in Feb-25, reflecting a 1.96% MoM increase, driven by higher prices across palm, rapeseed, soybean, and sunflower oils.

- Soybean Oil: United States (US) soybean oil prices increased 2.65% MoM to USD 1,005 per metric ton (mt), supported by rising soybean crush forecasts and growing biofuel consumption. Despite high domestic stocks and modest production growth, prices may remain elevated if biofuel demand persists. In Argentina, soybean oil prices rose 4.72% MoM to USD 1,063/mt, reflecting a 55% YoY increase in soybean crushing to 42.1 million metric tons (mmt). However, labor disputes and legal challenges threaten to disrupt operations, potentially sustaining upward price pressure in Mar-25 if processing capacity is affected.

- Palm Oil: Malaysia's palm oil prices fell 0.45% MoM to USD 1,095/mt in Feb-25, driven by lower production and declining exports due to heavy rainfall and fewer working days. Palm oil stocks are projected to fall 7% MoM to 1.48 mmt, reflecting ongoing supply constraints. Malaysia is maintaining a 10% crude palm oil (CPO) export duty for Mar-25, with the base price reduced to USD 991.79/mt. Despite export challenges, Malaysia is strengthening trade with Central Asia and Pakistan, while US biodiesel policy changes may support future demand.

- Sunflower Oil: Ukraine's sunflower oil prices faced pressure in Jan-25, with the processing volume falling by 16% due to a reduced harvest and weak sales. Despite this, Ukraine remains the European Union's (EU) top supplier. Russia’s sunflower oil prices increased by 0.46% MoM in Feb-25, driven by higher production costs and forecasted strong planting for 2025. In the EU, prices rose by 1.32% MoM in Feb-25, but imports declined due to weaker demand and tight domestic supplies.