The growing demand for soybean oil plays a key role in the market of oleaginous derivatives, directly affecting their prices and industry dynamics. This phenomenon is due to various factors that have converged to strengthen the position of soybean oil in the global market. According to the analysis of Roman DanteProfessor and researcher at the Center for Agribusiness and Foods of the Universidad Austral, the firmness of the soybean market is due to the fall in the stock of vegetable oils and a strong international demand.
It happens that world production of vegetable oils experienced significant changes in recent years. Palma oil production faced challenges due to adverse climatic conditions and restrictions in cultivation areas, which reduced its availability in the market. Simultaneously, the production of rapeseed oil decreased by factors such as unfavorable climatic conditions and commercial policies that limited their export. These factors led to a greater demand for soybean oil as an alternative in the food and biofuel industry.
According to Dante Romano, the stocks of the main vegetable oils are at historically low levels. “The stock/consumption of the main oils is in historical minimums, but with the palm in very low stocks and triggered prices. Meanwhile, that of Colza not only had low production, but both China and the US put tariffs that stop trade,”the expert points out. This led to a change in global demand, with a greater approach to soybean oil.
The biofuel policy in the United States also influenced the demand for soybean oil. The implementation of mandates that encourage the use of biofuels increased the demand for vegetable oils, especially soybeans, for biodiesel production. This trend contributed to keeping soybean oil prices at high levels. Romano emphasizes that “Without China’s used oil or Canada’s rapes, soybean oil would continue to be very demanded, and its stocks in the US are minimal”.
Impact on soy market prices
This context had a direct effect on prices. Although soy stock levels are high and China’s purchases move slowly, the values remain firm and that strength is attributed to the high demand for soybean oil and the reduction of the supply of other vegetable oils.
In Argentina, the export payment capacity is below US $ 270 per ton, while the industry offers US $ 297 with a reasonable margin for the Yu $ S317 harvest with “margin 0”. These values reflect the impact of soybean oil in the local market, establishing a price range that oscillates between these values. “That would be the floor and quotation roof, as well as its most reasonable value,” explains Romano.
It is worth remembering that the local oil industry experienced an increase in the production and export of soybean oil. In October, there was a processing record with 4 million tons, the highest value for that month of recent years. This increase in production allowed Argentina to position themselves as one of the main soybean oil suppliers in the international market. In addition, soy oil exports reached record levels, with India and China as main destinations, which contributed to strengthening the soy market at the local level.
Exportsoy oil n
Argentina is a key player in the world market of this by -product and the most recent data confirms this trend. In October, soy oil exports reached the highest volume in 17 campaigns, with record shipments that consolidate our country as one of the main global suppliers.
India was the largest buyer, with record imports of Argentine soybean oil if we consider the operations of recent months. China also increased its demand, quadruplying the average of the last six years. Together, both countries represent the bulk of Argentine soy oil exports.
Meanwhile, a recent report from the Rosario Stock Exchange stressed that international Argentine soybean oil trade was driven by the scarcity of other vegetable oils, which caused a strong increase in FOB prices, exceeding Chicago (CBOT) values by 14 %. Since October, soy oil contributions increased by 13 %, reaching values of US $ 1,180 per ton, the highest since February 2023.
Source: Ambito
