As palm oil is relatively cheap among edible oils, it is in
high demand in Asian countries. But that picture has changed in the Ukraine
war. Among the four major edible oils, including soybean, palm oil has recently
risen to the highest price. Soybean prices are also rising.
According to a Reuters report, the supply of sunflower oil through the Black Sea has been cut off due to the Russia-Ukraine war. In this situation, buyers from Asia as well as Europe have also increased the import of palm oil as an alternative. And that is why the highest price of palm oil has risen in the world market.
Indian traders said the price of crude palm oil, which will be shipped in March, has risen to about USD 1,925 per tonne. This includes insurance and transportation costs. In contrast, the price of crude soybean oil per ton is USD 1,865. In addition, rapeseed oil is being sold at around 1900 per tonne. But suppliers are unable to supply sunflower oil due to the closure of ports in the Ukraine crisis. The Black Sea exports 76 percent of the world's sunflower oil. Traders do not see any possibility of these ports being operational until the end of the war with Russia.
A Mumbai-based trader involved in buying oil from the global market said refiners in Asia and Europe have increased their purchases of palm oil due to declining supply of sunflower oil. That is why the price of palm oil has risen sharply. But they are not buying soybean oil because its supply is limited. Soybean production in Argentina, Brazil and Paraguay is expected to decline due to the drought.
A Kuala Lumpur-based trader said Asian buyers usually buy more palm oil because it is cheaper and easier to supply. But now they have to shell out USD 50 more in palm oil than in soybeans and sunflowers. However, he hopes buyers will buy more soybeans in April, when palm oil prices will fall again.
According to Indian refiners, Malaysia is now meeting the growing demand for palm oil in the market. Indonesia has limited exports. In this situation, the reserves of Malaysia are also decreasing. However, the country has benefited more from geopolitical tensions.
|Source: Online/KSU
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