W46 Soybean Oil Update: Soybean Oil Prices Fluctuate Amidst Brazilian Climatic Challenges, India's Import Decline in 2022/23 Season

Soybean Oil Prices Fluctuate in W46 Amidst Brazilian Climatic Challenges

In W46 in the soybean oil landscape, on Monday, November 13, futures for Dec-23 delivery closed up 0.66% to USD 0.5154 per pound (lb) due to climatic extremes in Brazil, with the greatest drought in the last 30 years in the center and north of the country and persistent rains in the south delaying planting. On Tuesday, November 14, soybean oil closed up 2.35% at USD 0.5275/lb. On Wednesday, November 15, soybean oil closed up 0.57% at USD 0.5305/lb as attention remained on planting in Brazil, with some consultancies suggesting a reduction in the initial harvest outlook.

On Thursday, November 16, soybean oil closed down 2.68% at USD 0.5163/lb, with a focus on South America and overlooking the North American sales report. Traders anticipated that National Oilseed Processors Association (NOPA) members processed 5.09 million metric tons (mmt) of soybeans in Oct-23, representing a 13% increase month-on-month (MoM). Estimates for members' soybean oil stocks were around 1.188 billion lbs.

India's Import Decline while Argentina's Soybean Oil Export Surge

India's imports of soybean oil in the 2022/23 period experienced a 12% decline to 3.68 mmt as it traded at a premium over palm oil and sunflower oil for most months. The Vegetable Oil Producers Association (IVPA) anticipates a reduction in India's overall vegetable oil imports to 16.2 mmt in the 2023/24 period, compared to the record 16.9 mmt in 2022/23. Specifically, soybean oil imports are predicted to decrease from 3.9 to 3.6 mmt. Notably, in Oct-23, soybean oil imports saw a substantial 62% decrease compared to Sept-23, reaching 135,325 mt, the lowest level in 34 months.

In the 2023/24 marketing year (MY), Argentina has a dominant position in soybean oil exports to the European Union (EU), with 134.1 thousand metric tons (mt), capturing a 51.8% market share, a significant increase from 30 thousand mt in the 2022/23 MY. Additionally, Ukraine has emerged as a significant importer of soybean oil, importing 72.9 thousand mt, accounting for a substantial 28.2% share.

In the Chinese oils and fats market for the 2022/23 MY, production amounted to 31.24 mmt. Notably, soybean oil contributed 17 mmt, while rapeseed oil accounted for 4.3 mmt, signifying that 70% of the oils and fats production is concentrated in these two products.