Global vegetable oil prices seen rising on tighter supply, says analyst Mielke

Global vegetable oil prices may increase in the coming months and beyond 2027 due to restricted supply, according to Thomas Mielke, a prominent industry analyst. Disrupted Black Sea sunflower oil shipments, in conjunction with declining South American soyoil exports, are contributing to this trend. Mielke, the executive director of Hamburg-based Oil World, predicts that sunflower oil shipments from Russia and Ukraine would be about 300,000-350,000 metric tons below their potential each month starting in October if a safe shipping route isn't established.

India, one of the countries most likely to feel the impact of this disruption, could be forced to increase its palm oil purchases to secure supplies if the Black Sea shipments remain delayed. India is currently the world's largest importer of edible oils and recently reduced its basic import duty on crude sunflower oil to 0% from 10%. Following Russian and Ukrainian attacks on ports in the Black Sea region, loading operations for shipments of grains and vegetable oils have been disrupted.

Meanwhile, South American soyoil exports have reached their seasonal peak and are expected to decline from October, as per Mielke's assessment. Slower global production growth of oils and fats means the vegetable oil industry is having difficulty keeping up with demand, particularly for biodiesel, due to higher energy prices. Additionally, palm oil has become more competitive following its recent price correction, which may encourage importers such as India to replace sunflower oil with it, resulting in a recovery in palm oil prices into 2027.