1. Weekly News

Bangladesh

Bangladesh Traders Push for Cooking Oil Price Hike Ahead of Ramadan

After the government transition, Bangladesh waived value-added taxes (VAT) to stabilize cooking oil prices but simultaneously approved a price hike to ease supply constraints. However, traders are now pushing for another price increase ahead of Ramadan. The retail availability of bottled soybean oil has declined due to reduced commissions and stricter credit policies, particularly in less-monitored areas like Jatrabari and Shonir Akhra. However, government-supervised markets maintain steady supplies. Retailers speculate that traders plan to raise prices before Ramadan, mirroring the Apr-24 price surge when the government intervened. On December 9, 2024, bottled soybean oil prices rose by USD 0.066/liter (L) to USD 1.44/L, with 2L bottles at USD 3.12 and 5L bottles at USD 7.00, while loose oil reached USD 1.29/L. The interim government, which replaced the Awami League administration, reduced the VAT on cooking oil imports by 5% and removed VAT fully at the production and business levels in Oct-24.

United States

US Soybean Crush Reaches Record in Dec-24 as Oil Stocks Rise

The United States Department of Agriculture's (USDA) February 3 report confirmed that United States (US) soybean processors crushed an all-time high of 218 million bushels on Dec-24. However, domestic soybean oil stocks rose to 1.7 billion pounds (lbs), up from 1.62 billion lbs in Nov-24, indicating a continued decline in implied demand. Soybean oil remained the dominant feedstock for biomass-based biodiesel, accounting for 36% of total feedstock use. Biodiesel plants consumed a record 724 million lbs of soybean oil in Nov-24, a 2% month-on-month (MoM) increase, while renewable diesel facilities reduced usage by 10% to 467 million lbs.

2. Weekly Pricing

Weekly Soybean Oil Pricing Important Exporters (USD/kg)

Yearly Change in Soybean Oil Pricing Important Exporters (W5 2024 to W5 2025)

Argentina

Argentina's soybean oil prices fell 2.94% week-on-week (WoW) to USD 0.99 per kilogram (kg) in W5 but remained 20.73% higher year-on-year (YoY), reflecting the country's strong production recovery. A 45% increase in output in 2024 has bolstered domestic supply and export capacity, stabilizing prices after last year’s drought. As the world’s top soybean oil exporter, Argentina’s prices are shaped by global demand, particularly from key buyers like India, China, and Bangladesh. The recent decline is due to improved supply, but future prices will depend on global market trends and competition from Brazil. Balancing domestic consumption and export demand will be crucial for price stability.

Brazil

Brazil's soybean oil prices surged 24.17% WoW to USD 1.49/kg in W5, marking a 28.45% MoM and 36.70% YoY increase. The rise is driven by strong demand for biodiesel production, with soybean crush expected to hit a record 57.10 million metric tons (mmt) in 2025, up from 55 mmt in 2024, according to the Brazilian Association of Vegetable Oil Industries (ABIOVE). Brazil's soybean harvest is also projected to reach a historic 171.7 mmt, supporting increased crushing activity.

United States

The US soybean oil prices increased 1.01% WoW and 8.70% MoM to USD 1/kg in W5. This rise is primarily due to a significant surge in export demand. In Jan-25, the USDA raised its forecast for 2024/25 US soybean oil exports to 1.6 billion lbs, marking a 46% increase from Dec-24's projection and a 159% rise from the 2023/24 estimate. This heightened demand from international markets has exerted upward pressure on prices. Furthermore, the US soybean crush reached a record-high of 2.29 billion bushels in the 2023/24 marketing year (MY), driven by increased demand for soybean oil as a feedstock for biomass-based diesel production. This expansion in crush capacity has bolstered soybean oil supplies, contributing to the observed price increase.

Netherlands

In W5, soybean oil prices in the Netherlands declined by 4.42% WoW to USD 1.08/kg, primarily due to increased global supply and weaker demand in key sectors. Brazil's record soybean production, projected at 171.7 mmt for the 2024/25 crop year, has boosted global soybean oil availability, with exports expected to reach 106.1 mmt. Moreover, Argentina's temporary reduction in export taxes on soybeans and derivatives has further increased supply. On the demand side, the European biodiesel market, a key consumer of soybean oil, faced challenges due to feedstock availability and high biodiesel prices, leading to reduced demand. This combination of increased supply from major exporters and softened demand has exerted downward pressure on soybean oil prices in the Netherlands.

Spain

In W5, Spanish soybean oil prices declined 0.75% WoW to USD 1.33/kg from USD 1.34/kg in W4. This decline is partially due to a stronger euro (EUR), which appreciated by 1.2% against the US dollar on Jan-25, reducing the cost of imports. Furthermore, demand from the biodiesel sector has weakened, with Spanish biodiesel production declining by 3.8% YoY in 2024, leading to reduced soybean oil consumption. Spain's soybean oil imports increased by 6.4% YoY in 2024, contributing to greater availability in the domestic market and putting downward pressure on prices.

3. Actionable Recommendations

Diversify Feedstock in the Biodiesel Industry to Reduce Soybean Oil Dependency

Brazil’s soybean oil prices surged due to strong biodiesel demand, while the US saw increased soybean oil usage in biomass-based diesel. With biodiesel accounting for a significant portion of global soybean oil consumption, countries should explore alternative feedstocks like used cooking oil, palm oil, and animal fats to reduce reliance on soybean oil. Policymakers can incentivize biodiesel producers to adopt a more diversified feedstock approach, reducing market pressure on soybean oil prices. Moreover, implementing flexible blending mandates that adjust based on feedstock availability could stabilize food and fuel markets, preventing extreme price swings due to supply constraints.

Enhance Soybean Oil Storage and Supply Chain Resilience

The USDA report highlighted record US soybean crushing and rising soybean oil stocks, indicating strong supply but weaker implied demand. Argentina’s output recovery and Brazil’s record harvest further boost global availability. Countries reliant on imports, such as Bangladesh and European markets, should leverage this increased supply by expanding strategic reserves when prices are lower. Investing in large storage facilities and efficient distribution networks will help mitigate short-term supply shocks and seasonal demand fluctuations. Governments and private sector players can collaborate to build reserve stocks that can be released during peak demand periods like Ramadan, preventing excessive price spikes.

Manage Price Volatility Ahead of Ramadan

Bangladesh's recent VAT reduction aimed at stabilizing cooking oil prices, yet traders are pushing for another hike before Ramadan. To mitigate sharp price increases, Bangladesh should secure long-term soybean oil import contracts from suppliers like Argentina and Brazil, where prices are declining. A diversified import strategy, including a mix of bulk and refined oil purchases, would help stabilize supply and reduce speculative price hikes. Moreover, monitoring distribution chains in less-regulated areas like Jatrabari and Shonir Akhra can prevent artificial shortages caused by traders withholding supply. Strengthening government-supervised markets and expanding subsidized sales through Trading Corporation of Bangladesh (TCB) outlets can also improve consumer affordability.

Sources: Tridge, bdnews24, Fast Markets, Sp Global, USDA