Recent Trends and Forecast of the Vegetable Oil Market

▶ It is predicted that the global production of the eight major oils will only increase by 2.1 million tons from April to September 2024, compared to the 3.2 million tons increase from October 2023 to March 2024.

▶ Global market reliance on soya oil is expected to increase for the remainder of the season.

▶ Global vegetable oil stocks are expected to decline to 31.8 million tons by September 2024 (a decrease of 0.7 million tons year-on-year), contrasting with the increases recorded over the past two years.

The vegetable oil market has experienced various fluctuations in recent years. Examining the trends and forecasts of this market in detail reveals the following key points.

Production and Growth Slowdown:

2Global production of the eight major vegetable oils for the 2023/24 season is expected to reach 219.1 million tons, representing a year-on-year increase of 5.3 million tons. However, this growth rate is significantly slower compared to the previous season's 9.4 million tons increase. In particular, palm oil production has only increased slightly, while sun oil and rapeseed oil production has also lost momentum. Despite this decrease, soya oil production remains robust, partially offsetting the decline in other oils. This reflects the differences in product-specific production within the vegetable oil market and the impact of increased demand for specific oils.

Production Increase Forecast:

Over the period from April to September 2024, global production of the eight major vegetable oils is predicted to increase by 2.1 million tons. This is compared to the 3.2 million tons increase in the previous six months, and reliance on soya oil is expected to increase, driven by the abundant supply of soybeans. This is one of the major shifts in the vegetable oil market, demonstrating the impact of changes in supply and demand for specific oils on the overall market.

Price Trends and Consumption Growth:

From October 2023 to May 2024, major vegetable oil prices faced pressure due to a slowdown in import demand for sun oil and an increasing export supply. This led to a year-on-year decline in vegetable oil prices, along with an increase in consumption in the food and energy sectors. Notably, global consumption of the eight major vegetable oils increased by 5.0 million tons year-on-year between October 2023 and March 2024. This reflects the high demand for vegetable oils among consumers and the growth of related industries.

Price Trends and Consumption Growth:

From October 2023 to May 2024, major vegetable oil prices were pressured by a slowdown in import demand for sun oil and an increasing export supply.

As a result, vegetable oil prices fell year-on-year, while consumption in the food and energy sectors increased.

From October 2023 to March 2024, global consumption of the eight major oils increased by 5.0 million tons year-on-year.

Inventory Decline:

The inventory increase, which stood at 2.0 million tons at the beginning of October 2023, decreased to 0.6 million tons by the end of March 2024.

Palm oil inventories have decreased significantly year-on-year.

Consumption Growth Slowdown:

Due to the overproduction of biofuels in the United States, a slowdown in consumption growth is expected from April to September 2024.

Global consumption growth during this period is expected to slow to 3.3 million tons, but overall, an 8.5 million tons increase is anticipated for the entire season.

Trade Volume Decrease:

Global export volumes decreased by 2.5 million tons from October 2023 to March 2024 due to tightening palm oil supplies and high inventory levels in importing countries like India.

The decrease in palm oil exports was not offset by a surge in sun oil exports.

Future Outlook:

Import volumes are expected to increase from April to September 2024 due to declining inventory levels in India and other importing countries.

However, limited supplies of sun oil and rapeseed oil remain a concern.

Increased palm oil production is gradually replenishing export supplies, and Argentinian soya oil exports are increasing, but Brazilian and US exports are limited by domestic demand.

Final Inventory Forecast:

Global vegetable oil stocks are projected to decline to 31.8 million tons by September 2024, representing a year-on-year decrease of 0.7 million tons.

This will be a combined effect of a decline in palm oil stocks and a reduction in sun oil inventories.

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