The sharp increase in global demand for soybean oil has raised the price of this soybean by-product to record levels in Brazil and the United States.
Ukraine’s sunflower oil exports decreased (because of the war), and Indonesia restricted palm oil exports, increasing demand for soybean oil. In addition, the soaring price of crude oil has increased the demand for biodiesel, and soybean oil is the main raw material of biodiesel. What is more helpful to push up the price is that the supply of soybean oil in Argentina is still uncertain due to the decline of soybean harvest this year. Therefore, importers are looking for this product in Brazil and the United States.
From March 10 to March 3, the recent contract of Chicago soybean oil futures rose as high as 13.9%, reaching 78.3 cents per pound ($1726.20 / ton) on March 3. On March 2, the recent contract of soybean oil reached 79.54 cents per pound (1753.54 US dollars / ton), the highest over the years.
Brazil’s soybean oil premium also increased, boosting domestic prices to a new high. In Sao Paulo, the price of soybean oil (including 12% ICMs turnover tax) rose 5.1% from March 10 to March 3, reaching R $9124.17/ton on March 3, the highest price ever recorded.
High demand for soybean by-products, crop failures in South America and sellers’ reluctance to sell boosted Brazil’s export premium and domestic prices. Brazilian soybean farmers are aware that the world’s demand for soybeans may increase, so they are reluctant to sell large quantities in the short term. Brazilian farmers are bullish on the basis of higher demand in China and lower inventories at Brazilian processing plants.
In the Brazilian spot market, the price of soybeans in Paranagua port reached R $202.90 per 60kg bag (equivalent to US $40.39) on March 3. On March 2, it reached 203.20 reais / bag, the highest nominal price since at least March 2006.
At present, the soybean harvest in the southeast and central and western regions of Brazil has been accelerated, and the unit yield of soybean in these regions is higher than expected. Recent rains in Rio Grande do Sul and Argentina have favoured late sown crops.
Brazil’s soybean harvest was 42.1% as of February 26, up from 23.4% in the same period last year, according to conab. Among the Brazilian states, 80.5% of the soybean crops in Mato Grosso have been harvested, 60% in Tocantins, 47% in South Mato Grosso, 55% in Goias, 26% in Minas Gerais, 29% in Parana, 31% in Sao Paulo, 17% in Santa Catalina, 19% in maranion, 13% in pioi, 7% in Bahia and 1% in Rio Grande do Sul.
Source: Master Boyi
Post time: Mar-15-2022