Global soybean oil production has risen approximately 5 percent, based on the 2015-’16 record supply of feedstock. By contrast, production of rapeseed oil has declined from the previous year. Smaller and, consequently, more expensive feedstock supply increases competition with other oils.

The nosedive of mineral oil prices has put a heavy damper on demand for vegetable oils. Biodiesel based on vegetable oils can currently hardly compete with mineral diesel, Agrarmarkt Informations-Gesellschaft mbH (AMI) reports. But there is hope. OPEC expects crude oil prices to surge again over the next few years in the wake of rising costs. Nevertheless, 2015-’16 global output of vegetable oils rises by just under 2 percent, to 179 million tons. At the same time, soybean oil production increasingly converges with that of palm oil, the world’s leading vegetable oil. Production of rapeseed oil falls for the first time in nine years, but continues to exceed the long-term mean. Production of sunflower oil stagnates.

In December, the vegetable oil price index of the Food and Agriculture Organization of the United Nations rose by almost 2 percent, but continues at a nine-year low even though biodiesel production has increased.

The downward slide came to a halt in December as soybean oil prices surged, hitting a six-month high. At the same time, prices for palm were stable. Continued fears that the weather could have a negative impact on crop output in Southeast Asia had offset slow demand, AMI reported. Nevertheless, at 141 points, the December index was one-fifth below the previous year’s level. The FAO price index measures the changes in international prices for 10 different vegetable oils, weighted with their shares in world trade.