Global vegetable oil prices seen rising for the rest of 2023 on supply uncertainty: Oilworld's Mielke

Global vegetable oil prices are set to rise for the remainder of 2023 driven by tightening supplies, global biofuel targets and China's return to the market, Oilworld analyst Thomas Mielke said at a conference March 8.

Argentina's soybean crop for 2023 could fall to as low as 25 million mt due to severe dryness in South America, Mielke said, down from Oilworld's previous estimate of 28 million mt and almost 20 million mt lower than early crop estimates for the world's largest soybean oil exporter in 2022.

In fact, Argentina could end up being the world's third largest importer of soybeans in 2023, Mielke said at the Palm & Lauric Oils Price Outlook Conference & Exhibition, noting that 2 million-3 million mt of soybeans have also been lost in Brazil.

Argentine soybean imports are likely to be boosted to 7 million-9 million mt in the calendar year 2023, Mielke said.

Mielke forecast Argentina's soybean oil price averaging $1,320/mt and Black Sea sunflower oil $1,300/mt over July-December. The RBD palm olein (refined bleached deorderized) price was pegged at $1,150/mt for same period.

Platts assessed soybean oil Brazil FOB Paranagua at $1,092.61/mt, sunflower oil FOB Black Sea at $980/mt and crude palm oil FOB Indonesia at $1,004/mt March 7, S&P Global Commodity Insights data showed.

Adding to the production deficit in vegetable oils, fulfilment of current biofuel targets would contribute to the bullish scenario shaping up for the second half of the year, as well as for 2024, Mielke said.

China's imports to rise

China's imports of oils and fats are set to recover by 3.5 million-4 million mt in 2022-23 and imports in the rest of the world are expected to rise by 2 million-2.5 million mt, Mielke said.

China's imports of vegetable oil and fats fell by more than 50% to 4.4 million mt in 2021-22, according to Oilworld, due to COVID-19 lockdowns, and that lost demand is now returning.

Mielke forecast that China's soybean imports in 2022-23 could rise to 97.2 million mt from 91.61 million mt a year ago, adding that Chinese importers started their soybean purchases early and imports increased to 45.9 million mt over September 2022-February 2023.

Indonesia, the largest vegetable oil exporter, is expected to ship about 27 million mt of palm oil in the current year, down marginally from the 27.45 million mt it exported in 2022, Mielke said.