India's Surge in Palm Oil Demand Drives Global Prices Upward
Palm and soybean oil prices have risen globally due to strong demand from India. The country's demand for palm oil has increased by 47% over the past seven months, supporting global prices. In Malaysia, October palm oil futures rose 2.4% over the week to a four-month high of MYR 4,860/t ($1,196/t). This is despite Malaysian palm oil stocks reaching a two-year high of 2.63 mln tons in July, which could limit further price gains.
The rise in prices is also attributed to higher crude oil prices, which improve the economics of using vegetable oils for biofuel production. In Chicago, December soybean oil futures gained 2.2% over the week to $1,533/t. Spot soybean oil prices in Brazil increased to $1,200-1,205/t FOB.
Reduced Black Sea supply is keeping sunflower oil prices elevated. Indian bid prices remained at $1,485-1,490/t CIF Mumbai, while Russian sunflower oil for September delivery rose by $30-40/t to $1,350-1,360/t FOB. However, market pressure could increase in September as seasonal supplies of sunflower, rapeseed and soybean oils expand.