Oil Price Volatility Hits Vegetable Oil Markets

Global oil prices have surged due to instability in the Middle East, causing volatility in agricultural futures markets. The September Brent crude futures price rose by 13.5% to $101/barrel last week and has since increased by another 4.8%. This price jump affects vegetable oils, including soybean and rapeseed oil.

However, palm oil futures on the Bursa Malaysia exchange have demonstrated relative stability, increasing only 0.7% over the past seven days to $1136/t. Palm oil exports from Malaysia in July grew by 8.1-15.9% compared to June, supporting quotes due to increased demand from the EU.

The December soybean oil futures on the CBOT exchange fell 5.6% to $1520/t, responding to a drop in oil and soybean prices at the beginning of the week. Spot prices for soybean oil in Brazil remained virtually unchanged at $1205-1215/t FOB.

Rapeseed oil markets are under pressure from increased supply due to shelling of Ukrainian ports and attacks on civilian vessels, causing a sharp increase in the supply of cheap rapeseed oil from Ukraine. November rapeseed futures on the Paris stock exchange fell by 4.6% to €531/t over the past seven days.