Peanut Oil Prices Show Bearish Trend Across the Globe in May 2023

Increased inventories and decreased end-user demand were blamed for the global market's declining price of Peanut Oil. Reduced import momentum from importing nations further fuelled the market's deteriorated price emotions for Peanut Oil, which in turn contributed to a consistent fall in production activity in exporting nations.

According to market players, the output of groundnuts is down, but exports are up as producers concentrate on reducing the rate at which they destock their stocks. It impacts the groundnut supply to oil millers as a whole. They said that the price of oil will inevitably rise as production declines.

The weakening of global demand as a result of some factors, such as the rise in prices of other vegetable oils like soybean oil, which is less expensive and one of the most versatile oils than groundnut (Peanut Oil), is another factor that contributes to May's lower price trend for Peanut Oil. This has impacted the overall demand for Peanut Oil in the global market. In addition, the economic slowdown in some markets, such as China and India, has slowed the growth of both the demand for and the production of Peanut Oil.

Furthermore, increased production and low or no interest from foreign traders have resulted in oversupplies among merchants, which is a major factor in the decline in Peanut Oil prices. Because of this, many producers, suppliers, and industry professionals focused on lowering the price of Peanut Oil to reduce stocks and attract foreign customers. The price trend in May has thus supported the weak trade momentum even more.

According to information, Brazil is one of the world's top producers of peanut oil, and since the start of 2023, the Brazilian real has been depreciating against the US dollar. Currency devaluation is thought to have contributed to the global decline in price trends for Peanut Oil. To combat rising inflation, the Brazilian Central Bank increased interest rates, which makes it more expensive for businesses to borrow money from the economy's slowing growth. As a result, Peanut Oil is now more expensive for customers outside of Brazil, which has added to the downward price trend.

As per ChemAnalyst, " the price of Peanut Oil is likely to increase reasonably within the international market. Players in the market likely have enough stock on hand to fill urgent orders placed throughout the international market. Due to an increase in orders and high energy prices, the exporting market will probably begin new production. Increasing upstream costs are also anticipated to continue fostering the expansion of the Peanut Oil market".