The Second Quarter of 2023 the US Soybean Oil Prices Online
North America
Soybean Oil prices in North
America followed similar market trends in Europe during Q2 2023 as the prices
of soybean Oil continued to drop from the beginning of Q1 2023 until June 2023.
This persistent weaker market sentiments for Soybean oil were supported by high
soybean oil inventories in the region, ample supply from European buyers,
Russia's interruption of the black sea grain trade, which continued to put
pressure on the market as exports from Ukraine, one of the main producers,
decreased. In addition, there was a hard down move in Crude Oil
Prices and sharply lower Russian edible oil and grains offers. This
combination was extremely negative for corn, soybean, and wheat prices. In
addition, rising interest rates and higher energy prices had a negative impact
on import activities as the production in exporting countries was reduced
significantly. Furthermore, n significant changes in refinery inventories also
impacted the North American soybean oil market sentiment, keeping the prices of
soybean in the southward direction.
Asia Pacific
Across the APAC region, Soybean Oil
prices showcased an ascending trajectory in China while continuing to
drop continuously in India, both of which are importing countries. With the
commencement of April 2023, the prices of Soybean oil dropped stably compared
to the previous month, as several traders stated that owing to stricter customs
inspections which led to longer-than-expected waiting times and demand
disruption. Also, Chinese soybean farmers have been complaining about a lack of
demand for domestic beans from the crushing industry, increasing domestic
soybean stocks in China, especially in northeast China, said another trader.
However, in the case of India also, the prices continued to drop in until
April. While in the middle of the second quarter, the prices went down by more
than 10 percent. One of the primary factors that supported this decline in the
prices includes higher soybean production in the exporting nations, which has
contributed to the increase in supply with higher stockpiles, putting further downward
pressure on its prices. At the end of June, the prices for Soybean oil improved
in the Chinese market as the demand from the downstream sector improved
slightly. With this, the prices of Soybean oil in China were assembled at USD
930/MT CFR Shanghai and INR 88000/MT Ex-Mumbai with a consistent diminishing
trend.
Europe
The second quarter (2023) of the
Soybean oil market ended on a negative note, with a steady decrease in prices.
Ukraine, which is one of the largest exporters of vegetable oil, is exporting a
large quantity of vegetable oil to the world market at a much lower price than
normal. The first half of the summer (May to August) was marked by a sharp
decrease in the price of soybean oil for delivery to FOB black sea Ukraine, as
the 60-day prolongation of the black sea grain initiative confirmed on 18 May
did not bring any relief in the downward prices of soybean oil. The European
market remained heavily loaded with stocks purchased in the short term ahead of
the renewal of the deal. As the second half of Q2 draws to a close, a few
market analysts say that soybean oil prices continued to decline in June amid
high global exportable supplies. Similarly, soybean oil prices in Germany also
decreased by over 2 percent. Apart from that, according to the Food Price Index
of the Food and Agriculture Organization of the United Nations (FAO), which
tracks monthly changes in global prices of widely traded food commodities. The
FAO's Food Price Index showed that inflation was 122.3% in June, down 1.4% from
May and down 23.4% from its peak in March 2022. As a result,
soybean Oil prices in Ukraine closed at $805 / MT Exw Kyiv in Ukraine while the
price in Germany was $ 1067 / MT CFR Hamburg.
South America
Soyabean Oil prices in the South
American region, especially in Argentina, show an increasing trend as prices
declined until May and slightly increased in June. Argentina's soybean yields
fell to a record low in April, according to a report from the Argentine Grains
Exchange (BAGE). One of the world's leading agricultural suppliers, Argentina,
was hit by a severe drought in the month of April, affecting the country's
corn, wheat, and soybean production, as well as its soybean meal and oil
exports to Africa and Asia. With a significant drop in Argentina's domestic production
amid this historic drought, the country has cut off a critical supply for
global food security. Following the mid-second quarter, the entities also
warned about the reasons behind the decrease in oilseeds supply and the higher
availability of oilseeds from the new harvest due to the arrival of the
harvesting season. The weakening of foreign currency during this month also
impacted the overall market trend of various edible oil both domestically and
in the foreign market. As the month progressed into June, the prices recovered
at a moderate level. One of the reasons behind this price increase is the
increase in the price of inputs such as fertilizer and pesticides used for
harvesting. Higher inquiries from the United States, China, and other importing
nations also contributed to the price increase of soyabean oil, one of the main
used vegetable oils. Soyabean Oil prices in June ended at USD 973 / MT FOB
Buenos Aires.
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