For the Quarter Ending September 2024
South America
Throughout the third quarter of 2024, the Soybean Oil market in South America maintained a stable pricing environment, with minimal fluctuations observed across the region. Various factors contributed to this steady trend, including balanced supply and demand dynamics, stable economic conditions, and consistent global market trends. The market was relatively unaffected by significant disruptions or plant shutdowns during this quarter, allowing for uninterrupted trading activities.
In Brazil, the country with the most notable price changes in the region, the Soybean Oil market demonstrated resilience and stability. Price movements were driven by factors such as the completion of the soybean harvest, sufficient supply levels, and moderate demand from both domestic and international markets. Overall, the pricing trends in Brazil mirrored the stability observed across South America, with prices maintaining a consistent trajectory throughout the quarter.
The quarter-ending price for Soybean Oil FOB Paranagua in Brazil stood at USD 935/MT, reflecting the overall stable pricing environment experienced in the region during the quarter 3 of 2024.
APAC
Throughout the third quarter of 2024, the Asia Pacific region witnessed a notable increase in Soybean Oil price negotiations, influenced by a multitude of factors. The market saw a surge due to heightened demand from various sectors such as food industries and biofuel production. This increased demand, coupled with stable supply conditions, contributed to the upward trajectory in prices. Additionally, rising freight costs and a positive market sentiment further buoyed the pricing environment. In China specifically, the market experienced significant price changes, reflecting the broader trends in the region. The quarter saw a continuation of the positive momentum, with prices steadily increasing. Seasonal patterns and market dynamics played a crucial role in shaping the price trends. Despite a slight dip in prices from the previous quarter, the overall quarter-on-quarter comparison showed a 5% increase, indicating a strengthening market. The quarter concluded with Soybean Oil priced at USD 946/MT FOB Shanghai in China, marking a robust end to the period and demonstrating the sustained upward momentum during the quarter.
Europe
In quarter 3 of 2024, the Soybean Oil market in Europe experienced a significant uptrend in prices, driven by a confluence of factors. High international demand, protracted supply bottlenecks, and currency fluctuations contributed to the overall price increase. The market saw disruptions in production and supply chain, along with plant shutdowns, which further tightened the availability of Soybean Oil, pushing prices higher. In the Netherlands, the market witnessed the most significant price changes, with a notable surge in prices. Seasonal trends and correlation in price changes played a role in the overall price dynamics, reflecting the impact of global market conditions on domestic pricing. The quarter recorded a 6% increase from the previous quarter, with a 2% price difference between the first and second half of the quarter. The latest quarter-ending price was settled at USD 1048 per metric tonne of Soybean Oil FOB Rotterdam in the Netherlands, showcasing a consistent upward trend in pricing throughout the quarter backed by distinct supply and demand dynamics
For the Quarter Ending June 2024
North America
In the U.S., the Soybean oil market is poised for significant shifts, mirroring trends observed in the key producing nations, particularly southern America. The second quarter of 2024 reveals a dynamic landscape with pronounced price volatility, characterized by distinct market behaviors.
April 2024 initiated with robust momentum, marked by rising prices due to insufficient inventory and heightened regional demand. On the supply front, participants in the market continued to grapple with limited supplies of soybean oil in response to inquiries from the regional market. To meet this growing demand, units continue to maintain their manufacturing levels despite facing higher costs, primarily due to input material expenses including limited availability of feed soybeans which has led to a significant increase in procurement levels.
Market participants were opting to replenish their stocks in this environment, resulting in a noticeable growth in both output and new orders at a steady pace. Supporting this, there has been a continuous increase in freight charges compared to the previous month, contributing to an overall positive outlook for market trading sentiments during the entire quarter. Lastly, rising prices in other exporting nations including Argentina, Ukraine and others further influenced the overall market sentiments in the United States as well, resulting in a continuous higher price during the entire quarter.
Asia Pacific
The second quarter of 2024 exhibited a pronounced upward trajectory in soybean oil prices across the APAC region, notably from China, with a steady decline at the quarter's end. This period was characterized by several significant factors influencing market prices. Chief among these were disruptions in the supply chain due to adverse weather conditions in major soybean-producing regions, which affected the harvest and reduced soybean oil availability. Additionally, rising input costs, including fertilizers, fuel, and labor, have amplified production expenses, driving up prices. Increased demand from downstream sectors, particularly the biofuel and food industries, exerted further upward pressure on prices. The continuous rise in global freight costs contributed to this inflationary trend, making exports more expensive and impacting overall market sentiment. In China, which experienced the most substantial price fluctuations, the overall trend was decidedly positive. The country's soybean oil prices soared due to strong demand from end-user sectors and constrained supply. Seasonality exacerbated these factors, with the planting season in major exporting countries contributing to the tight supply situation. The correlation between increased demand and limited supply resulted in a steady price rise within China. Comparing the first and second halves of the quarter, there was a consistent increase in prices, reflecting heightened demand and supply challenges. The quarter-ending export price for soybean oil stands at USD 920/MT, underscoring the robust upward price momentum.
Europe
During the entire second quarter of 2024, the European Soybean Oil market experienced a significant upward trend in prices. This trajectory was influenced by multiple factors, including a substantial drop in regional inventories, continuous heightened demand from downstream sectors, and a significant depreciation of the Euro against the US dollar. The persistent arrival of regional quotations weakened market supplies, and competitive prices from other producing nations, such as those in South America, further influenced this trend. Heavy rains in March and April delayed soybean harvesting in other producing nations, reducing oilseed supplies to the global market. This supply reduction supported price increases in nations including Ukraine, affecting overall supply-demand dynamics. As of April, the FAO Vegetable Oil Price Index averaged 130.9 points, up 0.3 points (0.3 percent) month-on-month, marking a 13-month high. In the Ukrainian market, participants grappled with limited soybean oil supplies amid regional inquiries. To meet growing demand, production units maintained manufacturing levels despite higher costs, primarily due to the limited availability of feed soybeans. On the demand side, persistent strong buying sentiments in the local market, coupled with increased freight charges, contributed to a positive market outlook. Weather disruptions, such as prolonged lack of rain, low soil moisture, dry winds, and varying intensity frosts, stressed crops during critical growth periods. Surveys by the end of May indicated that these conditions potentially impacted crop growth, development, and final yields, reducing soybean availability for downstream oil processing facilities. Additionally, the recent Russian invasion of Ukraine caused global export disruptions, further affecting trading sentiments. This led to higher oil prices across the region and neighboring states due to rising fuel and transportation costs. As a result, the combination of these factors, supported by May's weather disruptions, kept the trading cost of soybean oil on the upper side throughout the quarter. Conclusively, Q2 2024 ended with the price of Soybean Oil at USD 905/MT in Ukraine, underscoring an optimistic pricing environment.
South America
In South America, particularly in Argentina, soybean oil export prices saw a significant rise throughout the second quarter of 2024. This rise in the prices was supported by key factors including weather disruptions, trade disputes, a persistent rise in overseas quotations, limited feed availability, etc. Starting with this, adverse weather conditions in Argentina have led to delays in the soybean harvest, with crops currently in full swing conditions, posing challenges for crop yields and production forecasts. Factors such as weather patterns including pest infestations and dry spells in various parts continue to influence harvest outcomes and market prices for soybean oil. Furthermore, the country continues to face increasing competition from Brazil and the US for global market share, as prices continue to remain elevated in these nations, thereby further supporting the overall price rise. While on the demand side, the global soybean oil market continues to experience robust demand, particularly from major importing nations. This sustained demand is being driven primarily by the biofuel sector. Consequently, the elevated demand has exerted upward pressure on global edible oils such as soy oil prices, leading to a corresponding increase in prices in key exporting nations such as Argentina, the United States, and Brazil. Additionally, price competitiveness witnessed by other producing nations, including European and neighboring states further supports this overall price rise until the final weeks of June. As a result, overall, the second quarter of 2024 was characterized by weather disruptions, trade disputes, persistent rises in overseas quotations, and limited feed availability. These factors collectively contributed to a significant increase in soybean oil export prices, particularly in Argentina and other major producing countries.
For the Quarter Ending March 2024
North America
During Q1 2024, the Soybean oil pricing dynamics in the North American region were influenced by a range of factors witnessed in other exporting nations. The market situation in the USA, where price fluctuations were most pronounced, played a significant role in shaping the overall trend.
The quarter began with a notable rise in prices, driven by the higher demand arriving from the regional market coupled with sufficient inventories balancing the overall demand side. Moreover, owing to a steady price rise witnessed in other exporting nations, the market of the United States continued to follow the market trajectory of these nations thereby resulting in a steady price rise in the month of January to remain competitive within the market. Supporting this, steady rising demand arriving from the downstream food and other industries further contributed to this trajectory. However, the market witnessed a significant drop in prices as February commenced. Additionally, The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 117.3 points in February, down 0.7 percent from January and 10.5 percent from the same month a year ago. The FAO Vegetable Oil Price Index decreased by 1.3 percent from January to stand 11 percent below its February 2023 value. International soy oil prices dropped markedly, underpinned by prospects of abundant soybean outputs in South America, while ample global export availabilities of sunflower and rapeseed oils pushed their prices down further supporting the overall downward trajectory. Lastly, the market rebounded witnessing a steady optimistic trajectory as that of other exporting nations, particularly Brazil. This further kept the overall market sentiments for soybean oil on the upper side supported by the ease in freight costs and appreciation of the dollar against other nations' currency, making the goods less expensive for the merchants and buyers.
Asia Pacific
In Q1 2024, the Soybean Oil market in the APAC region witnessed complex pricing dynamics influenced by various factors beyond the conventional top influences. While the overall trend for Soybean Oil prices in China was on the lower side, some nuances shaped the market situation. The seasonality factor played a role as it was typically an off-season after the Lunar New Year holiday break, resulting in slim domestic demand and weighing on prices. Additionally, China's importation of rival vegetable oils like sunflower seed oil and rapeseed oil at competitive prices partially displaced Soybean Oil demand from South America which further added pressure to prices. Abundant supplies in the domestic market also contributed to falling prices, as China received large volumes of soybeans since late November 2023, leading to increased domestic production and stocks of Soybean Oil. Notably, Traders, in response to the prevailing market conditions, displayed a distinct reluctance to issue new quotations, reflecting a cautious approach amidst the uncertainty. This hesitancy stemmed from the intricate interplay of supply and demand dynamics. Additionally, external factors such as geopolitical tensions and economic uncertainties contributing to higher freight charges supported by a continued devaluation of Chinese currency further affected the market sentiments. The convergence of these diverse factors created a scenario marked by evident fluctuations and a discernible downturn in the overall trajectory of the market. However, a steady recovery in the prices was witnessed as the market progressed towards the final month of the first quarter of 2024. Rebound in end-user consumption in oil terminals, while competitive oils market such as dropped forecasts of Malaysian palm oil production supported this price trajectory. Furthermore, spurred by biodiesel demand and the strengthening dollar against the Yuan further amplified imports, fuelling March's surge in its prices.
Europe
In the European market, particularly in Ukraine, the first quarter of 2024 witnessed an overall positive trajectorty but saw prices weaken in the first two months. Ukrainian soybean prices, which had surged in demand during autumn, experienced a significant decline in January, largely due to global market conditions.Despite an initial surge in demand, Ukrainian soybeans and their downstream soybean oil prices have experienced a significant drop. This downturn was influenced by the global decline in trading prices of soybean oil, including those from other exporting nations like Brazil. In response, Ukrainian factories have adjusted their strategies by slowing down soybean oil exports to the EU at reduced costs to maintain competitiveness in the market. Additionally, regional purchasing activity for soybean oil decreased due to subdued off-takes from biofuel and other feed industries. The devaluation of the Ukrainian currency against the dollar also made soybean oil more expensive in the regional market in terms of the Euro, further dampening market activity until mid-2024.
However, towards the end of the quarter, the domestic soybean oil market in Ukraine witnessed a significant price increase. The upward price trend in the soybean oil sector started due to price growth in the export market, further supported by increased domestic demand. Moreover, various market participants stated that the border blockages constrained Ukrainian soybean oil exports to Poland, resulting in reduced market supply and adding pressure on domestic prices. Nonetheless, the decrease in border blockages and the resurgence of demand for Ukrainian products fueled the ongoing upward trajectory of soybean oil prices throughout the month. Participants in the soybean oil market see ample inventories amidst a rebound in demand this month. Producers noted increased demand from end-user sectors since March's start, buoyed by rising regional off-takes from biofuel and feed industries maintains a positive trading outlook.
South America
In South America, particularly in Brazil, soybean oil export prices saw a significant decline throughout the quarter, followed by a steady increase in the middle. Starting from January 2024, despite production delays in Brazil, factors such as abundant harvests and uncertain demand drove prices down. Supplies of soybean oil in January were sufficient to meet both regional and overseas demand. However, import demand from Asia slowed before the Lunar New Year, causing significant drops in soybean prices in January, even though Brazil's harvest proceeded at a faster pace than usual. The prices of soybean oil followed the movement of the soybean complex, but a steady upward trend was observed in mid-Q1. This increase was attributed to several factors, including delayed planting seasons due to adverse weather conditions, which disrupted agricultural schedules and created imbalances in supply and demand, which witnessed a steady rise from the importing nations. Additionally, global inflationary pressures led to higher input prices, requiring higher selling prices to maintain profitability supported by higher freight costs. This phenomenon underscores the intricate interplay between macroeconomic factors and agricultural commodities, wherein broader economic trends directly influence pricing dynamics within the agricultural sector. Lastly, towards the end of the first quarter, the soybean market in Brazil experienced sluggish business activity, with moderate commercialization at ports and disagreements between buyers and sellers leading to price declines. Despite increased supplies from recent harvests, strong domestic demand for soybean oil for biodiesel production drove up domestic prices, making Brazilian soybean oil less competitive in the global export market availability compared to producers like Argentina. This, along with suppliers' reluctance to sell amid expected price increases, prompted importing nations to seek alternative options for soybean oil particularly Argentina, significantly impacting supply and demand dynamics.
For the Quarter Ending December 2023
North America
During the entire fourth quarter of 2023, Soybean Oil prices in North America mirrored the trends observed in Europe. This decline was attributed to reduced global consumption, caused by ample stock availability among domestic traders and decreased demand in regional and neighboring markets, including the biofuel sector.
The situation is further exacerbated by the onset of the peak harvesting season from September to early November 2023 across the exporting nations primarily in Ukraine resulting in a significant surge in Soybean seed supplies, leading to a significant price drop in importing nations. Furthermore, the ongoing price decline was also supported by a decrease in Soybean oil consumption within the biodiesel industry throughout the quarter, marking a continuous drop in its prices. The market remained on the lower side until the final weeks of December 2023.
This was further exaggerated by the weakened food price index which according to the experts, in 2023 was 13.7% below the previous year’s average, and only the international sugar price index was higher for this period. The price index for vegetable oils decreased by only 1.4% compared to November, which reflects low purchases of palm, soybean, rapeseed, and sunflower oil. Generally, in 2023 this indicator was 32.7% lower than the previous year’s level.
Asia Pacific
The pricing dynamics of Soybean Oil in the APAC region underwent significant shifts during the fourth quarter of 2023, experiencing a notable decline in October, a rebound in mid-Q4, and another drop as December concluded. Various factors played a role in influencing the market throughout the quarter. Firstly, a decrease in demand from the biodiesel and animal feed industries contributed to the downward trend in soybean oil prices. Additionally, concerns arising from the conflict in Ukraine and disruptions in global supply chains raised food security apprehensions in the APAC region, impacting import strategies and influencing soybean oil prices. Moving into November 2023, market experts observed a substantial increase in soybean oil prices in the Chinese market. South America, currently in its planting season, faced concerns about weather conditions, such as drought and excessive rainfall, potentially affecting future harvests and limiting supply. High operating levels indicated strong demand and limited storage capacity, creating urgency among buyers and further pushing prices upward. Positive returns in the soybean oil markets attracted investors, contributing to increased demand and resulting in price hikes. Moreover, trade momentum improved in November 2023, supported by higher downstream demand and new inquiries from the regional market. Towards the end of the fourth quarter, the Food and Agriculture Organization of the United Nations (FAO) reported a marginal decrease in its Food Price Index in December. Vegetable oil prices, including palm, soy, rapeseed, and sunflower seed oils, fell slightly month-on-month. Premiums for soybean cargoes delivered to China from Brazil and the US Gulf were lower in 2023 than the previous year but exhibited greater volatility due to factors like a bumper soybean crop in Brazil, logistical issues, and sluggish Chinese demand. The demand for concentrated consumption of terminal oils remained average, with bearish factors influencing the market.
Europe
Throughout the European market, the entire fourth quarter witnessed a decline in Soybean Oil prices, driven by three key factors. Firstly, a significant decrease in demand from the biofuel sector resulted in lower consumption, exerting pressure on prices. Secondly, geopolitical tensions and weather disruptions in exporting regions led to reduced soybean production and higher prices. Lastly, increased competition from other vegetable oils, such as palm and rapeseed oils, contributed to the overall decline in Soybean Oil prices in the European market. In the Netherlands, Soybean Oil prices declined during the quarter due to a surplus in the domestic market, leading merchants to reduce prices to clear excess inventory. In December 2023, new export orders experienced a sharp decline, resulting in reduced output, a consecutive decrease in outstanding work for the eleventh month, and a four-month high in the depletion of input stocks. This prompted companies to cut employment significantly, marking the most pronounced job shedding in three months. Input costs continued to decline, driven by reduced raw material and energy prices, causing output charges to slightly decrease for the fourth consecutive period. The quarter-ending price of Soybean Oil in the Netherlands was USD 956/MT. Likewise, in Ukraine, consumer demand for soybean oil remained consistently constrained in October, with purchases mostly in small quantities while anticipating a further seasonal drop in prices. Given these circumstances and the faster arrival of new crop soybeans, processors lowered their product bid prices, contributing to the downward pricing trajectory. Moving into November, the biodiesel industry significantly shifted their purchases from soybean oil to other oils as feedstock, impacting global market prices for Soybean Oil. Moreover, changes in the exchange rate between the Ukrainian hryvnia and other currencies further influenced export prices, potentially making Ukrainian soybean oil less expensive for certain buyers. This supported a depreciating price trajectory until the final weeks of December 2023. In response to the anticipated continuous sluggishness in future trade conditions, manufacturers and suppliers offered substantial quantities of Soybean Oil at reduced prices, resulting in the assembled price for Soybean Oil at USD 675/MT.
South America
Across the South American region, Soybean Oil pricing faced challenges in the South American region, influenced by various factors throughout the quarter. Among South American countries, Brazil witnessed significant fluctuations in Soybean Oil prices. Prices dropped in October, rebounded notably in November, and experienced another decline as December concluded. Initially, a substantial decline in demand, both domestically and internationally, exerted downward pressure on prices. Additionally, an abundant supply of Soybean Oil, particularly in Brazil, played a role in the descending price trend. Also, the Brazilian government's forecast of a record-high soybean harvest led to increased soybean oil supply, putting downward pressure on prices. Also, the higher inventory levels of palm oil, a competing vegetable oil, added to the downward pressure on soybean oil prices. Reduced purchasing activity and inventory reduction ensued. Moving forward in November 2023, it saw increased intakes of Soybean Oil from major importing nations, primarily in the APAC region, and trade disruptions from China, supporting market activity. The appreciation of the Brazilian real against the dollar further influenced the overall pricing trend for the month. Heading into December 2023, Soybean Oil supplies remained sufficient among merchants to meet demand within the region and from overseas markets. Both the supply and demand sides played a dominant role in the market, with market participants having overcapacity in early production stages and ample supply sources.
For the Quarter Ending September 2023
North America
During the third quarter of 2023, Soybean Oil prices in North America mirrored the trends observed in Europe. Although slightly lower than the peaks witnessed in the latter part of July, soybean oil prices remained elevated throughout August 2023. This rise was primarily due to concerns about the crop's safety amidst extremely dry weather conditions in specific exporting regions. Weather conditions in South America, especially in August, slowed down import momentum, adding to the price increase. Furthermore, In the United States, the Manufacturing Purchasing Managers' Index (PMI) showed positive growth, increasing from 46.3 in June to 49 in July, indicating expansion in the manufacturing sector for the second consecutive month. The Consumer Price Index (CPI) for July 2023 in the United States was 305.69. Meanwhile, the latter part of 2023 witnessed a surge in demand for oil and gas, leading to increased demand for guar gum. India, the world's largest producer of guar gum, saw speculators raising bets due to a strong trend in the spot market. Scarce supplies from growing regions drove up guar seed prices. However, the Indian government imposed export restrictions on guar gum in August 2023 to curb rising domestic prices. However, as September arrived, Soybean Oil prices in North America, particularly in the United States, experienced a sharp decline. This decrease was influenced by weaker international quotations at U.S. ports. The domestic market's abundant supply of edible oils, specifically those derived from Soybean Oil, supported this downward trend.
Asia Pacific
In the APAC region, soybean prices followed an upward trajectory at the beginning of Q3 and continued to stay elevated until August, only to plummet in September 2023. This shift was primarily due to disrupted weather patterns in exporting countries, leading to fewer soybean imports and, subsequently, a supply shortage. Furthermore, a surge in Chinese demand for soybeans resulted in a recovery of freight rates, alleviating margin pressures that had persisted due to weak downstream demand for imported beans from China. According to data from the National Bureau of Statistics, the official Purchasing Managers' Index (PMI) for July registered 49.3, indicating a slowdown in manufacturing sector activity among larger businesses and state-owned firms. In August, industries operated at a reduced pace, maintaining high supply rates while inventory levels declined, causing concern among market participants. Domestic merchants focused on replenishing their inventories in anticipation of rising demand, leading to a shift in the Consumer Price Index (CPI) from -0.3% in July to positive territory in August. Despite a brief uptick in the official NBS Manufacturing PMI for China from 49.3 in July to 49.7 in August 2023, surpassing market expectations, the FOB price realization of Soybean Oil took a downward turn as September approached. Soybean oil and meal, the main products derived from soybeans, experienced falling prices due to weakened demand from the biodiesel and animal feed industries, respectively. This reduced consumption rate was influenced by buyers' cautious approach amid escalating macroeconomic uncertainties. Additionally, uncertainty regarding the impact of the Double Festival, a major shopping holiday in China, further contributed to the downward trend in Soybean Oil prices during the month.
Europe
Throughout the third quarter of 2023, the Soybean oil market experienced turbulent market sentiments. In July, the cost of soybean oil, the second-most traded vegetable oil after palm oil, surged due to persistent concerns about the region's soybean production prospects. Although inventories remained sufficient to meet domestic needs, they showed a steady increase compared to the previous month. Additionally, the FAO price index, tracking commonly traded food commodities, averaged 123.9 points in the most recent data, up from a revised 122.4 points in June. Despite a nearly 12% decrease from the previous year, it was still 22% lower than the record high set in March 2022 during Russia's invasion of Ukraine. Further, in mid-Q3, the Eurozone Manufacturing PMI was 43.5, indicating a sharp decline in the manufacturing sector. New orders and export business dropped at record rates, contributing to the sector's deterioration. In the soybean market, both domestically and overseas, activity increased, with national reserve soybean auctions performing well. Additionally, a sharp increase in Ukraine's oil transit fees raised fuel costs, causing a 0.5% rise in inflation and slowing down the decline in the highest national price growth rate in the European Union. This, coupled with higher transportation expenses, pushed up soybean oil prices for the month. However, moving forward in September, international food raw material prices remained relatively stable, with declines in certain vegetable oils, including soybean oil, dairy products, and meat, offset by notable increases in sugar and corn prices. Adequate inventories among market participants supported the overall demand within the region, bolstering the September market outlook for soybean oil across Europe. With this, the price for Soybean Oil in Ukraine was assembled at USD 882/MT.
South America
In Argentina, Soybean Oil prices experienced a surge until the middle of the third quarter in 2023, but they plummeted as Q3 ended in September. This volatility was primarily driven by robust demand from importing nations such as China, Germany, Egypt, and Pakistan, coupled with a supply shortage due to weather disruptions caused by prolonged dry conditions in Argentina. These unfavorable weather patterns significantly reduced the crop yield in Argentina, a major exporter of soybean oil. Additionally, Argentine exports of grains and derivatives yielded revenue of US$1.925 billion in July 2023, marking a 21.8% increase from the previous month but a 39.2% decrease compared to July 2022. However, the economic landscape in Argentina was marred by challenges. August witnessed a staggering inflation rate of 12.4%, the highest monthly change in over three decades, aggravating the nation's existing economic instability. Argentina was already grappling with annual inflation rates nearing 115%, causing severe financial strain for its citizens and pushing many into poverty. Moreover, the Consumer Price Index (CPI) in Argentina rose from 1818.08 points in July to 2044.28 points in August 2023, influenced by higher manufacturing input costs resulting from escalating energy and raw material prices. At the same time, a significant decline in soybean oil prices in September can be attributed to various factors. Historically, September experiences reduced demand for soybean oil as food manufacturers prepare for the upcoming winter holiday season, coinciding with the completion of the soybean harvest. Additionally, an expected increase in the production of other vegetable oils, including sunflower oil, in 2023 added pressure on soybean oil prices. The rise in export competition due to this increased production further impacted soybean oil prices. To provide context, Soybean Oil prices in June concluded at USD 938/ MT FOB Buenos Aires.
For the Quarter Ending June 2023
North America
Soybean Oil prices in North America followed similar market trends in Europe during Q2 2023 as the prices of soybean Oil continued to drop from the beginning of Q1 2023 until June 2023. This persistent weaker market sentiments for Soybean oil were supported by high soybean oil inventories in the region, ample supply from European buyers, Russia's interruption of the black sea grain trade, which continued to put pressure on the market as exports from Ukraine, one of the main producers, decreased. In addition, there was a hard down move in crude oil prices and sharply lower Russian edible oil and grains offers. This combination was extremely negative for corn, soybean, and wheat prices. In addition, rising interest rates and higher energy prices had a negative impact on import activities as the production in exporting countries was reduced significantly. Furthermore, n significant changes in refinery inventories also impacted the North American soybean oil market sentiment, keeping the prices of soybean in the southward direction.
Asia Pacific
Across the APAC region, Soybean Oil prices showcased an ascending trajectory in China while continuing to drop continuously in India, both of which are importing countries. With the commencement of April 2023, the prices of Soybean oil dropped stably compared to the previous month, as several traders stated that owing to stricter customs inspections which led to longer-than-expected waiting times and demand disruption. Also, Chinese soybean farmers have been complaining about a lack of demand for domestic beans from the crushing industry, increasing domestic soybean stocks in China, especially in northeast China, said another trader. However, in the case of India also, the prices continued to drop in until April. While in the middle of the second quarter, the prices went down by more than 10 percent. One of the primary factors that supported this decline in the prices includes higher soybean production in the exporting nations, which has contributed to the increase in supply with higher stockpiles, putting further downward pressure on its prices. At the end of June, the prices for Soybean oil improved in the Chinese market as the demand from the downstream sector improved slightly. With this, the prices of Soybean oil in China were assembled at USD 930/MT CFR Shanghai and INR 88000/MT Ex-Mumbai with a consistent diminishing trend.
Europe
The second quarter (2023) of the Soybean oil market ended on a negative note, with a steady decrease in prices. Ukraine, which is one of the largest exporters of vegetable oil, is exporting a large quantity of vegetable oil to the world market at a much lower price than normal. The first half of the summer (May to August) was marked by a sharp decrease in the price of soybean oil for delivery to FOB black sea Ukraine, as the 60-day prolongation of the black sea grain initiative confirmed on 18 May did not bring any relief in the downward prices of soybean oil. The European market remained heavily loaded with stocks purchased in the short term ahead of the renewal of the deal. As the second half of Q2 draws to a close, a few market analysts say that soybean oil prices continued to decline in June amid high global exportable supplies. Similarly, soybean oil prices in Germany also decreased by over 2 percent. Apart from that, according to the Food Price Index of the Food and Agriculture Organization of the United Nations (FAO), which tracks monthly changes in global prices of widely traded food commodities. The FAO's Food Price Index showed that inflation was 122.3% in June, down 1.4% from May and down 23.4% from its peak in March 2022. As a result, soybean Oil prices in Ukraine closed at $805 / MT Exw Kyiv in Ukraine while the price in Germany was $ 1067 / MT CFR Hamburg.
South America
Soyabean Oil prices in the South American region, especially in Argentina, show an increasing trend as prices declined until May and slightly increased in June. Argentina's soybean yields fell to a record low in April, according to a report from the Argentine Grains Exchange (BAGE). One of the world's leading agricultural suppliers, Argentina, was hit by a severe drought in the month of April, affecting the country's corn, wheat, and soybean production, as well as its soybean meal and oil exports to Africa and Asia. With a significant drop in Argentina's domestic production amid this historic drought, the country has cut off a critical supply for global food security. Following the mid-second quarter, the entities also warned about the reasons behind the decrease in oilseeds supply and the higher availability of oilseeds from the new harvest due to the arrival of the harvesting season. The weakening of foreign currency during this month also impacted the overall market trend of various edible oil both domestically and in the foreign market. As the month progressed into June, the prices recovered at a moderate level. One of the reasons behind this price increase is the increase in the price of inputs such as fertilizer and pesticides used for harvesting. Higher inquiries from the United States, China, and other importing nations also contributed to the price increase of soyabean oil, one of the main used vegetable oils. Soyabean Oil prices in June ended at USD 973 / MT FOB Buenos Aires.
For the Quarter Ending March 2023
North America
During the first quarter of 2023, the price of Soybean oil in North America fluctuated due to conflicting market sentiments and erratic market dynamics. Prices dropped in the first half of Q1 as a result of the war's protracted settlement and the signing of various agreements between Russia and Ukraine. This, in turn, reduced the cost of edible oils, especially soybean oil. Because of the constant supply and low demand, the price remained low. All oils are now more affordable in the local US market as a result of the global decline in edible oil costs. Due to ample supplies on the domestic market, prices fell throughout the duration of the second half of the second month of Q1 2023. The third month of the quarter saw a price rise because the overall level of demand was high, and there was low availability of products available to meet customer needs.
Asia-Pacific region
Soybean oil prices fell in the Asia-Pacific region in Q1 2023. Importers raised their purchases at the beginning of the quarter, particularly in the first month, as a result of low global pricing and strong crush margins. China imported 6 MT of soybeans from Brazil in February, which was a record-high amount compared to a year earlier. Prices remained constant during the second month of the quarter as they continued to decline since there was sufficient demand from both domestic consumers and traders. Although during the last month of the quarter, market goods prices recovered to their typical range. The price of Soybean Oil was estimated to be USD 1377/MT at the end of Q4 for FOB Shanghai (China) in March 2023.
Europe
Soybean Oil prices fell in the European region in the first quarter of 2023, boosted by exporters who mostly fulfilled contracts that were already in place. While land logistics continued to run smoothly, there were more new contracts. Furthermore, because of efficient transportation and a sharp decline in fuel prices during the first half of the quarter, the product's price plummeted. Due to the availability of inventories on the domestic market and a drop in downstream demand, prices fell in the second part of Q1. Because there are no concerns about a limited supply, the product's price has decreased on the domestic market. The price of Soybean Oil was estimated to be USD 1385/MT for CFR Hamburg (Germany) in March, around the conclusion of Q1 2023.
For the Quarter Ending December 2022
North America
Soybean oil prices fluctuated in North America during the fourth quarter of 2022, backed by opposing market emotions and unstable market dynamics. Due to the war's tardy resolution and the signing of some agreements between Russia and Ukraine, prices fell in the first half of Q4, which lowered the price of edible oil. The price stayed low because of a consistent supply and strong demand. Due to the worldwide fall in edible oil prices, all oils are now cheaper on the local US market. Prices decreased throughout the duration of the second half of the second month of Q4 of 2022 due to insufficient supplies on the domestic market. The third month of the quarter saw a price fall because the overall level of demand was low, and plenty of products were available to meet customer needs. The price of soybean oil for the USA in December 2022 was reported to be USD 1452.831/MT toward the conclusion of Q4 2022.
Asia-Pacific region
In Q4 2022, Soybean Oil prices varied in the Asia-Pacific area. Due to high global prices and low crush margins, importers lowered their purchases at the beginning of the quarter, especially in the first month. In October, China's soybean import fell 5% from a year earlier to 4 MT, marking their lowest level. Due to increased demand from domestic consumers and traders, prices suffered during the second month of the quarter as they continued to rise. However, product prices returned to their normal range in the market during the quarter's final month. The cost of Soybean Oil was estimated to be USD 1480/MT at the end of Q4 for FOB Shanghai (China) in December 2022.
Europe
Soybean Oil prices in the European region fluctuated in Q4 2022, helped by exporters who were primarily carrying out contracts that were already in place. The number of new contracts decreased in light of the persistent overstuffing of inland logistics. Additionally, during the early half of the fourth quarter, the product's pricing dropped due to inadequate transportation and a rapid rise in fuel prices. Prices increased in the second half of Q4 as a result of rising downstream demand and a shortage of inventory on the domestic market. The product's price in the domestic market has increased because of worries about a restricted supply. The price of Soybean Oil was estimated to be USD 1650/MT for CFR Hamburg (Germany) in December, around the conclusion of Q4 2022.
For the Quarter Ending September 2022
North America
In North America, during the third quarter of 2022, soy oil prices varied, supported by conflicting market emotions and erratic market dynamics. Prices increased in the early half of Q3 because of the war between Russia and Ukraine, driving up the cost of edible oil. Due to low supply and considerable demand, the price remained high. The price of all oils on the local US market has increased because of the global rise in the price of edible oil. Due to adequate supplies in the domestic market, prices fell throughout the second part of Q3 of 2022. The overall demand was low, and the ample presence of products to satisfy the customer needs further supported the decrease in price in the second half of the quarter. Towards the end of Q3 2022, the price of Soybean Oil was recorded to be USD 1490/MT for the USA in September 2022.
Asia-Pacific region
In the Asia Pacific region, Prices for soybean oil fluctuated in Q3 2022, helped by exporters who were primarily carrying out contracts that were already in place. The number of new contracts decreased because of the ongoing overstuffing of inland logistics. The product's pricing also dropped during the first half of the third quarter due to inadequate transportation and a steep rise in fuel prices. Prices increased in the second part of Q3, backed by rising downstream demand and a shortage of inventory on the domestic market. A rise in the product's price in the area has been encouraged by worries over a restricted supply. Towards the end of Q3 2022, the price of Soybean Oil was recorded to be USD 1607/MT for Ex-Mumbai India in September 2022.
Europe
In the European region, Soybean oil prices fluctuated in Q3 2022, supported by exporters mostly working under agreements already in place. Considering the continued overburden in land logistics, the number of new contracts fell. Additionally, insufficient transportation and a sharp increase in fuel prices resulted in a decrease in the product's pricing during the first part of the third quarter. Due to increasing demand from the downstream sectors and low stocks on the domestic market in the second half of Q3, prices surged. Concerns over a limited supply have helped to encourage an increase in the product's price in the area. Towards the end of Q3 2022, the price of Soybean Oil was recorded to be USD 1420/MT for Ex-works Kyivin September 2022.
For the Quarter Ending June 2022
North America
In North America, the prices of Soyabean Oil were increased during the Q2 of 2022, backed by the strong demand from the domestic market. In the first half of Q2, the prices were hiked due to the Russia-Ukraine war leading to inflation in the edible oil price. The price remained high in the second half of Q2 due to low inventories and high demand. The global surge in the price of edible oil has pushed up the prices of overall oils in the domestic market of the USA. It was also observed that the USA is historically a net exporter of Soybean oil. But with renewable diesel plants operational or under construction, many cultivating lands are getting used, so in the next couple of years, there won't be enough domestically grown soy to meet demand. Towards the end of the quarter, Soybean oil prices were observed to be USD 1940/MT on FOB basis during June 2022.
Asia-Pacific region
In the Asia Pacific region, the price of Soybean oil fluctuated during the Q2 of 2022, backed by the mixed market sentiments in the domestic market. In the first half of Q2, Soyabean Oil price increased owing to the ease of lockdown restrictions across many provinces in China. The demand for Soybean Oil increased due to the extreme demand for protein from oils, and Soyabean oil provides protein in high content, whereas Soybean Oil inventories were high, and the number of imported Soybeans increased. In the second half of Q2, the price decreased in the Indian domestic market due to high inventories and low offtakes from the domestic market. However, at the end of Q2, the price increased in the Indian domestic market. Towards the end of the quarter, Soybean oil prices were observed to be USD 1840/MT Ex-Qingdao in China during June 2022.
Europe
In the European region, the price of Soybean oil fluctuated during Q2 2022, backed by the exporters mainly dealing with previously signed contracts. The number of new contracts decreased as land logistics remained overloaded. In addition, lack of transport and significant growth in fuel prices also reduced the product's price in the first half of the Q2. In the second half of Q2, the prices increased due to high demand from the downstream industries and low inventories in the domestic market. Towards the end of the quarter, soybean oil prices were observed to be USD 1380/MT Ex-w Kyiv (Ukraine)June 2022.
For the Quarter Ending March 2022
North America
In North America, the prices of soybean fluctuated in the first half of the Q1 2022 followed by sharp surge in the market prices late January onwards. Due to excess heat and dryness in the late December and early January the harvest was poor following crop rescues from recent rains. During the onset of second half, the prices went up due to Russia Ukraine invasion leading to port congestion and suspended transportation. Adding to this, Indonesian government sanction ban on the export of palm oil increased pressure on the alternative oil manufactures with increasing demand. Increase in prices affected the soybean oil market in North American market as it is a major exporter to USA. Towards the end of the quarter, the prices of soybean oil were observed to be USD 1489/ton.
Asia-Pacific region
In the Asia Pacific region, the soybean oil prices fluctuated drastically in Q1 2022. In the first half of Q1, soybean oil prices were on the lower side due to sufficient supply in the domestic market. In major exporting countries of soybean oil, the productivity of the feedstock soybean was surplus in the previous quarter, contributing to a fall in its prices globally and typically export volumes positively as the USA is the major exporter of soybean oil to India. Also, the prices of the downstream biodiesel market were running low. At the onset of the second half, the prices of the feedstock soybean increased due to prolonged heat stress and below-average rainfall. The Russian Ukraine war aggravated higher prices by disrupting the trade routes and hiking up freight charges amid the climate crisis. Towards the end of the quarter, the prices of soybean oil were observed to be USD 1751/ton Ex-Qingdao in China.
Europe
In the European region, the soybean oil prices increased gradually in January. During the outset of Q1 2022, the prices fluctuated due to poor harvest owing to severe dryness and high temperature, but recent rains rescued the feedstock soybean crop from draught damage. Over the top, the Russian Ukraine invasion surged the prices globally due to increased freight charges, suspended transportation, and route disruption. Later in the month of March, the Indonesian government-imposed ban on the export of palm oil, sending big importers like India to scramble for alternatives like Soybean oil, which setting down pressure on the soybean oil manufacturers leading to price hike. Towards the end of the quarter, the prices of soybean oil were observed to be USD 1489/ton in Ukraine.
