November 2024 Outlook Report: Oils

- Key Indicators: Global freight prices averaged USD 3,521.60 per 40-foot container in Oct-24, a significant 27.19% month-on-month (MoM) decrease. The drop was primarily due to an early end to the typical peak shipping season. Meanwhile, the World Bank's fertilizer index rose to an average of 123.48 points in Oct-24, a 4.01% MoM increase. This rise was driven by an increase in urea and diammonium phosphate (DAP) prices, which offset the decline in potassium chloride. The Food and Agriculture Organization (FAO) Vegetable Oil Price Index averaged 152.7 points, a 7.23% MoM increase driven by higher prices across palm, soybean, sunflower, and rapeseed oils.

- Soybean Oil: United States (US) Soybean oil futures on the Chicago Mercantile Exchange (CME) rose to USD 0.433 per pound (lb) for Dec-24, fueled by tight global oil supplies and higher palm oil prices, driving demand shifts. The United States Department of Agriculture (USDA) confirmed 105.23 thousand metric tons (mt) of soybean sales to China for 2024/25, supporting demand despite a 29% year-on-year (YoY) increase in US soybean stocks. Soybean oil prices reached USD 955/mt in Oct-24, up 5.29% MoM. The US market faces pressure from rising imports of used cooking oil and tallow, impacting biofuel production. Meanwhile, Argentina's soybean oil industry saw volatility, with a 26.26% MoM drop in the Aug-24 crushing, followed by a strong rebound in Sep-24, leading to a 12.77% MoM price rise in Oct-24 to USD 1,059/mt. Argentina's soybean oil exports are projected to reach 5.5 million metric tons (mmt) for 2024/25, far surpassing Brazil's 1.4 mmt.

- Palm Oil: Malaysia's palm oil prices rose 33.75% YoY to USD 1,058/mt in Oct-24, driven by tight global supply and Indonesia’s shortfall. However, prices dipped later in the month due to weaker Indian demand and a stronger ringgit. Sep-24 inventories reached 2.01 mmt, aided by a 37% drop in local consumption, while exports grew 0.93% MoM. Production fell 3.8% MoM but remains on track for the highest annual output since 2020. New policies, including a 10% export tax increase in Nov-24, aim to balance fiscal goals with smallholder support.

- Sunflower Oil: Ukraine's sunflower oil prices rose to USD 1,058/mt in Oct-24, a 10.20% MoM increase driven by reduced harvest forecasts and strong demand. In the 2024/25 season, sunflower oil production is expected to decline by 14.8%, reflecting a 19% drop in seed yield due to poor weather. Meanwhile, Russia’s sunflower oil prices surged to USD 1,041/mt, a 34.67% YoY rise, amid drought conditions and strong export growth. The European Union’s (EU) sunflower oil prices reached USD 1,201/mt, a 12.03% MoM increase, driven by tighter supply and higher demand from processing plants.