1. Weekly News

Bangladesh

Mobile Courts in Bangladesh Fine Two Companies for Creating Artificial Soybean Oil Shortage

Mobile courts in Bangladesh fined two companies for creating an artificial crisis of soybean oil despite available stocks. In a joint operation with police and Bangladesh Standards and Testing Institution (BSTI) officials, the National Directorate of Consumer Rights (DNCRP) discovered that wholesalers in Khatunganj were withholding oil supplies, citing unavailability. One store was fined USD 164.68 (BDT 20,000) after falsely claiming a shortage despite possessing a large stock. Another store was fined USD 411.70 (BDT 50,000) for failing to properly account for and distribute 600 cartons of oil, contributing to the artificial shortage.

Soybean Oil Supply in Bangladesh Remains Unstable Ahead of Ramadan Despite Government Assurances

Local traders had mixed reactions about the inconsistent supply of bottled soybean oil in Bangladesh ahead of Ramadan, which is a peak demand period. Despite the Commerce Adviser’s assurance that the market would normalize, reports indicate a continued shortage. Retailers and wholesalers in Dhaka, Chattogram, and other major cities are struggling with limited stock, while consumers are forced to visit multiple stores to find the product. The shortage follows the government's rejection of refiners' requests for price hikes, impacting supply chains. Price increases have been modest, but the supply issue persists, with traders and wholesalers expecting some relief by early Mar-25.

India

India's Soybean Oil Imports Surge in Jan-25 as Refiners Shift from Palm Oil

India's soybean oil imports rose 5.6% in Jan-25 to 444,026 metric tons (mt), the highest in seven months, as refiners shifted from palm oil due to unfavorable refining margins. This shift contributed to a 45% drop in palm oil imports, reaching a near 14-year low of 275,241 mt. The increased demand for soybean oil is expected to support the United States (US) soybean oil futures, while reduced palm oil purchases may pressure Malaysian benchmark prices. Ample global soybean supplies and sunflower oil have kept prices competitive, further influencing India's import preferences.

Nepal

Nepal's Refined Soybean Oil Exports to India Surge in FY 2024/25

Nepal's refined soybean oil exports to India through the Birgunj customs point increased significantly in the first half of the 2024/25 fiscal year (FY), reaching approximately 561 million liters (L) valued at USD 138.57 million (INR 11.99 billion). This marks a sharp rise from 111 million L worth USD 1.28 million (INR 111 million) during the same period last year. Customs officials attribute the growth to improving export volumes and convenient trade relations with India. In contrast, refined sunflower oil exports through the same port fell sharply to 22.845 million L worth USD 37.20 million (INR 3.219 billion), down from USD 1.14 billion (INR 99.41 billion) in the previous FY. The increased soybean oil exports suggest rising demand in India, which could impact regional soybean oil prices and trade dynamics.

United States

ISA Unveils Bio-Based Lubricant, Poised to Boost Soybean Oil Demand

In W7, the Illinois Soybean Association (ISA) identified a new use for soybean oil, which could significantly boost demand. Research funded by ISA has led to the development of a bio-based lubricant, an environmentally friendly alternative to petroleum. The product is expected to enter commercialization within 60 to 90 days, with additional uses of soybean oil and meal being explored at the Soy Innovation Center. This innovation aims to increase soybean oil demand, offering a buffer against potential trade disruptions and ensuring long-term value for the industry.

2. Weekly Pricing

Weekly Soybean Oil Pricing Important Exporters (USD/kg)

Yearly Change in Soybean Oil Pricing Important Exporters (W7 2024 to W7 2025)

Argentina

Argentina's soybean oil price increased to USD 1.06 per kilogram (kg) in W7, reflecting a 6% weekly rise and a 30.86% year-on-year (YoY) increase. This price rise coincides with Argentina’s soybean export prices aligning with Brazil's, as Brazil's record harvest pressures the market. While soybean oil remains cheap in South America, US prices are rising, narrowing the price gap. The premium for Argentine soybean oil may disappear if supply and demand dynamics shift, especially as the 2024/25 harvest begins, with many soybean sales yet to be priced. This could impact future soybean oil prices.

Brazil

Brazil's soybean oil prices rose to USD 1.22/kg in W7, marking a 0.83% increase from the previous week and an 8.93% rise YoY. The increase follows higher soybean crushing estimates, as reported by the Brazilian Association of Vegetable Oil Industries (Abiove), which maintains its forecast for Brazil’s soybean production and exports. However, the rising resistance to the European Union's (EU) anti-deforestation law by Brazil’s soybean growers could lead to supply disruptions, especially if farmers refuse to comply unless offered a price premium for deforestation-free soy. This could put upward pressure on soybean oil prices, particularly as global demand for Brazilian oil remains strong. Future price trends will depend on how Brazil navigates these regulatory challenges and how they affect soybean oil production and export volumes.

United States

US soybean oil prices remained stable at USD 1.01/kg in W7, reflecting a modest 2.02% month-on-month (MoM) increase. ISA's bio-based soybean oil lubricant, set for commercialization in 60–90 days, presents a key demand growth opportunity. Further exploring industrial uses can enhance market potential. This could help support US soybean oil prices in the long term, particularly by reducing dependency on volatile export markets and mitigating risks from trade disruptions. Future price trends will likely benefit from these expanding uses, ensuring stability and growth in the industry.

Netherlands

In W7, soybean oil prices in the Netherlands increased to USD 1.08/kg, an increase of 0.93% week-on-week (WoW) and 21.35% YoY. While the Netherlands has a limited domestic production of soybeans, importing over 99% of its supply, it plays a crucial role in the European agricultural trade, particularly in the re-exportation of processed agricultural goods. The country’s strategic location and infrastructure, including the Port of Rotterdam, enable it to serve as a gateway for soy-based products, such as soybean oil, to the broader European market.

Despite the recent increase in soybean oil prices, the pressure from global supply and demand dynamics could influence future pricing trends. In particular, if supply from major soybean producers like Brazil and Argentina continues at high levels, and European demand remains relatively subdued due to challenges in biodiesel production, prices may face downward pressure in the short to medium term. Conversely, if demand recovers, especially from biodiesel producers, prices could stabilize or rise further.

Spain

In W7, Spain's soybean oil prices rose to USD 1.41/kg, reflecting a 5.22% WoW increase and a 23.68% YoY rise. The potential return of trade protectionism under the US could impact Spain’s agricultural exports, including soybean oil. If new tariffs are imposed on imported goods, Spanish companies may face higher costs for exports to the US, reducing their competitiveness. While the direct impact on soybean oil prices may not be immediate, potential shifts in trade dynamics and market access could influence future pricing trends.

3. Actionable Recommendations

Strengthen Market Oversight and Combat Supply Manipulation

Given the artificial soybean oil shortages reported in Bangladesh, authorities should enhance monitoring mechanisms, especially in key wholesale regions, to prevent hoarding and ensure accurate supply distribution. Implementing penalties for misleading claims and increasing transparency in supply chain reporting could help stabilize the market and prevent future price manipulations.

Diversify Import Sources and Build Strategic Reserves

To address supply inconsistencies, Bangladesh and other affected regions should diversify their soybean oil import sources, focusing on stable suppliers like Brazil and Argentina. Additionally, governments could invest in building strategic reserves that can be tapped during peak demand periods, such as Ramadan, to reduce vulnerability to short-term supply disruptions and mitigate price volatility.

Promote Alternative Uses for Soybean Oil

The development of bio-based lubricants and other innovative uses for soybean oil, as identified by the ISA, presents an opportunity to expand demand. Governments and industry stakeholders should invest in research and commercialization of such products to support long-term demand growth and reduce reliance on traditional market channels, helping to stabilize prices.

Sources: Tridge, News Foodmate, Noticias Agricolas, Brownfield News, BSS News, The Daily Star, Bichos de Campo, World Grain, MSN