Global vegetable oil production is expected to rise by only 1.2% in the September 2023/October 2024 season, according to forecasts by Oil World reported by Spanish vegetable oil company Lipsa.
The existing surplus would gradually turn into a supply shortage during the season, the 30 October report said.
Palm oil remained by far the world’s largest producing oil, with a harvest of more than 81M tonnes expected, representing more than 37% of total oil production.
Global palm oil stocks remained high at the time of the report, with substantial increases in China and India more than offsetting significant declines in Indonesian palm oil stocks.
However, a global production shortfall is forecast for January/September 2024, with stocks expected to decline by 0.9M tonnes, mainly in Malaysia, Indonesia and India, according to Oil World.
The main risk factor that could further dampen production was the uncertain effects of El Niño on palm oil and lauric oil production, the report said.
In Russia, favourable weather conditions during most of the growing season facilitated above-average yields. According to APK Inform estimates, Russian sunflower seed production is expected to total 17M tonnes, slightly below last year’s level.
Ukrainian oilseed production was expected to reach a four-year record of 23.6M tonnes in 2023, an increase of 3.3M tonnes. The country’s sunflower harvest had advanced rapidly in September, thanks to favourably dry weather, with comparatively high yields, the report said.
At the time of the report, the vegetable oil market had experienced strong price pressure due to an unusually strong supply of sunflower.
The narrow spread between palm olein and sunflower oil had reduced for palm oil demand from price-sensitive buyers such as China, India and Pakistan, who had increased sunflower oil purchases due to its more attractive price.