Tighter Supply Pushes Global Vegetable Oil Prices Upwards

Global vegetable oil prices are expected to rise in the coming months due to tighter supply. Disrupted Black Sea sunflower-oil shipments, which would normally amount to around 300,000-350,000 metric tonnes per month from October, will not materialize if a safe shipping corridor is not established. This shortage coincides with declining soyoil exports from South America, which have passed their seasonal peak and are expected to decline further in October.

Thomas Mielke, executive director of Hamburg-based forecaster Oil World, stated that India will likely be among the countries most affected by this disruption. If Black Sea shipments remain delayed, India may need to increase its palm oil purchases to secure supplies. The country has already taken steps to mitigate this risk by cutting its basic import duty on crude sunflower oil to zero from 10% last week.

Mielke attributed the decline in soyoil exports to slower global production growth of oils and fats, which is struggling to keep pace with demand, particularly for biodiesel due to higher energy prices. As a result, palm oil has become more competitive following its recent price correction, encouraging importers like India to replace sunflower oil with it.