Vegetable oil prices under pressure due to coronavirus pandemic
March 25, 2020
BY UFOP
The vegetable oil markets are currently extremely calm. The coronavirus pandemic is creating pressure in the financial and commodities markets and also pulling down spot prices for oilseeds and byproducts. Above all, crude oil has lost substantial ground in the wake of the oil output dispute between OPEC and Russia. The restrictions to curb public life, imposed as a consequence of the corona crisis, are reflected in the demand for transport fuels. Municipalities are ramping down local public transport. Road-based goods traffic, construction activities and the number of commuters all have dropped sharply. Diesel sales are in steep decline internationally. Demand for, or use of, biodiesel as a blending component and, finally, biodiesel producers’ demand for vegetable oil is decreasing to the same extent.
Rapeseed oil most recently cost 690 euros per metric ton. This translates to a more than 18 percent decline within one month. Soybean oil stood at 605 euros per ton, down just about 15 percent, not least because soybean and rapeseed prices in Chicago and Paris dwindled considerably. Sunflower oil and palm oil recorded a decline of 11.5 and 16 percent respectively compared to the previous month. The main stimulus for palm oil comes from the international futures market, which is impacted negatively by the estimated 20 percent slump in Malaysian palm oil exports in March 2020.
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