Oilseeds: World Markets and Trade-202001
- Vegetable oil prices have risen appreciably over the last 3 months, adding nearly $100 or more per ton to prices depending on the oil. The magnitude of price gains has been the greatest for the lower-priced oils, particularly palm oil, resulting in a narowing of the price spread among the four major oils. The spread between palm and rapeseed oil fell 50 percent from nearly $360/ton to $180/ton while the spread between palm and soybean oil declined roughly 75 percent from nearly $160/ton to near $40/ton. Palm oil has been the principle driver in the vegetable oil market as strong demand growth has been met with limited growth in supplies. Global consumption of palm oil grew an estimated 6 million tons in 2019, roughly double the growth in global production, leading to a draw-down in stocks. This strong demand is in part a reaction to the low palm oil prices seen earlier in the year as well as rising demand for biodiesel, particularly in producing countries. In China, import demand for all oils has accelerated as a reduction in oilseed crush, a function of lower demand for protein meals in response to African Swine Fever, has curbed local supplies.