USDA raised forecast for global vegetable oil production and consumption in 2024/25, but lowered stock estimate, supporting quotes

In a May report, USDA experts released the first balance of vegetable oils for 2024/25 MR, where compared to the previous season, they increased the forecast of world production by 2% and consumption by 3%, but lowered the estimate of ending stocks by 6%, which supported the quotation of soybean oil .

According to the forecast, the world production of vegetable oils in 2024/25 FY will grow to 228.28 million tons (223.8 million tons in 2023/24 FY, 218.33 million tons in 2022/23 FY and 208.55 million tons in 2021/ 22 MR), in particular soybean - 65.4 (62.4; 58.6 and 60) million tons, palm oil - 80 (79.3; 78 and 73) million tons, while the production of sunflower and rapeseed oil will remain at the level of 21 ,7 and 34 million tons, respectively.

The consumption of oils in the food sector will grow more than in industry, as the development of electric vehicles gradually reduces the need for biodiesel. However, industrial consumption will still exceed food consumption.

The world consumption of vegetable oils in 2024/25 MR will grow to 224.9 (218.8; 211.2 and 202.8) million tons, in particular soybean oil – to 64.5 (61.4; 58.9 and 59.8) million tons, palm – up to 79 (77.44, 74.2 and 69.4) million tons, rape – up to 34.36 (33.5, 32.7 and 30.2) million tons, sunflower – up to 34, 36 (33.5; 32.7 and 30.2) million tons, while sunflower will decrease to 20.4 (20.7; 19.5 and 17.55) million tons. The largest global consumers - China and India will continue to increase use of vegetable oils.

World ending stocks of oils in 2024/25 MR will decrease by 6.4% compared to the current season, from 31.8 to 29.9 (31.86 and 29.84) million tons due to the reduction of palm and rapeseed oil stocks.

According to the report, July soybean oil futures on the Chicago Stock Exchange rose 5.8% to $1,046/t in two sessions (-1.8% for the month, +5.1% for the year), despite an increase in global production and forecast of final stocks of soybeans.

July palm oil futures on Bursa Malaysia fell on Friday, but rose 1.6% yesterday to 3,868 ringgit/t, or $815/t (+12% y-o-y), in line with last week's level.

According to Trading Economics, the average price of sunflower oil with delivery to buyers for the week increased by 1% to $858/t (890 $/t last year), but in Ukraine demand prices at Black Sea ports remained at $800-810/t .

Rising prices for sunflower meal and oil support sunflower purchase prices in Ukraine, which rose by UAH 500-800/t during the week to UAH 16,800-17,000/t or $360-380/t ex-factory, while delivery prices to Turkey and Bulgaria remained at the level of $440-460/t DAP.