The vegetable oil markets are grappling with multiple global factors, with one wildcard potentially reshaping the landscape: the policy decisions and trade rhetoric of the recently re-elected U.S. President, Donald Trump. From proposed tariffs on Canadian goods to hints of a potential U.S.-China trade war revival, Trump’s moves could send ripples across palm oil, soy oil, rapeseed oil, and sunflower oil. Let’s explore the current prices, drivers, and how Trump’s actions could alter the trajectory of these key markets.

Palm Oil

  • Current Price: The BMD CPO spot benchmark fell to $993/mt, down from $1068/mt last week.
  • Key Drivers:
    • Indicators of weaker demand and cheaper fossil fuel weighed heavily. Cheaper fossil fuel could hamper the implementation of B40 in Indonesia, stimulating blenders to pay penalties rather than blend, said RKS Insights to Vesper
    • Malaysian palm oil exports for January 1–20 were 18% lower than in December 1-20, as reported by Intertek.
    • Indian palm oil imports hit a 5-year low, with only 110k mt cleared in early January, due to uncompetitive pricing.
  • Trump’s Potential Impact:
    • Trump’s protectionist policies could amplify trade uncertainty. A resurgence of the U.S.-China trade war might reduce Chinese soybean purchases, indirectly impacting palm oil prices by increasing competition in alternative edible oil markets.
    • A potential slowdown in Indonesia’s B40 biodiesel program, influenced by falling fossil fuel prices, could be compounded by a U.S. shift toward soy-based biofuels under Trump’s administration.

Soy Oil

  • Current Price: CBOT soy oil climbed slightly to $1007/mt from $1002/mt, while crude soybean oil FOB Argentina fell to $1084/mt from $1137/mt.
  • Key Drivers:
    • A record Brazilian soybean crop forecast of 172.4 mmt (Agroconsult) pressured prices.
    • NOPA reported 1.24 billion lbs of U.S. soy oil stocks, the largest in five months.
    • However, drought conditions in Argentina have prompted the Buenos Aires exchange to hint at potential reductions in crop estimates.
  • Trump’s Potential Impact:
    • The potential imposition of 25% tariffs on Canadian goods could disrupt U.S.-Canada trade flows, potentially favoring U.S. soy oil as a domestic alternative.
    • Trump’s approach to the 45Z biofuel tax credit could incentivize biofuel production, supporting soy oil demand. Conversely, a trade war with China could suppress U.S. soybean exports, indirectly affecting soy oil prices.

Rapeseed Oil

  • Current Price: MATIF rapeseed dropped to EUR 532/mt from EUR 541/mt, while crude rapeseed oil FOB Dutch Mill slid to EUR 1030/mt from EUR 1140/mt.
  • Key Drivers:
    • The market is nervous about the situation in the US, which biofuel sector is a large outlet for Canadian canola oil.
    • However, demand for Canadian canola is high, with 4.925 mmt exported so far this season, 85% higher than last year.
  • Trump’s Potential Impact:
    • Trump threatened a 25% tariff on Canadian goods, setting a Feb 1 deadline for a decision. The rhetoric softened recently when Trump said he would take a reasonable approach; however, the market remains nervous.
    • Another factor is that the U.S. Department of Agriculture published an interim rule for biofuel crops that left out canola. Traders fear its exclusion signals that canola may never be approved for tax benefits or other government support for use as biofuels.


Sunflower Oil

  • Current Price: FM price for crude sunflower oil (6 ports) rose to $1240/mt from $1205/mt, while Ukrainian sunseed prices increased to UAH 24,800/mt ($588) from UAH 24,000/mt ($570).
  • Key Drivers:
    • “Crushing plants are starved. Operate even at losses. But the capacity is reduced. Some in a “stop/start” mode. Sunoil price doesn’t keep up with the sunseed price,” said one Ukraine-based crusher to Vesper”.
    • APK Inform reported good demand for sunseeds from export-oriented companies in Ukraine.
    • APK Inform reported to Vesper that in December, Ukraine produced 456,000 mt of sun oil vs 661,450 mt in December last year. The deficit of seeds is visible.
  • Trump’s Potential Impact:
    • Trump’s vow to meet with Putin and Zelensky to negotiate an end to the Russia-Ukraine war could bring volatility to the sunflower oil market. Any resolution might stabilize supply chains, while prolonged conflict could maintain elevated prices.


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