Global vegetable oil production is expected to grow by just 1.2% in September 2023/October 2024, according to Oil World forecasts released by Spanish company Lipsa.
The existing surplus would gradually turn into a supply shortage during the season, according to the October 30 report.
Palm oil remains by far the largest oil produced in the world, with an expected harvest of more than 81 million tons, as it represents more than 37% of total oil production.
Global palm oil stocks remain elevated at the time of reporting, with notable increases in China and India offsetting significant declines in Indonesia.
Forecast of production deficit, impact of El Niño and price dynamics among vegetable oil
However, there is a forecast global production shortfall for January/September 2024, with stocks expected to decline by 0.9 million tonnes, mainly in Malaysia, Indonesia and India, according to Oil World.
The risk factor that could further reduce vegetable oil production is the uncertain effects of El Niño on palm and lauric oil production, according to the report.
In Russia, favorable weather conditions during most of the growing season thus facilitated above-average yields. According to APK Inform estimates, Russian sunflower seed production is expected to total 17 million tons, below last year's level.
Meanwhile, Ukrainian oilseed production is forecast to reach a record in 2023, reaching 23.6 million tons. This represents a significant increase of 3.3 million tons compared to the previous year. The country's sunflower harvest advanced quickly in September thanks to favorably dry weather, with comparatively high yields, according to the report.
At the time of the report, the vegetable oil market had come under severe price pressure, however, due to an exceptionally strong sunflower supply.
Furthermore, the small price difference between palm olein and sunflower oil has decreased demand for palm oil. In price-sensitive countries, such as China, India and Pakistan, the preference has been for sunflower oil due to its more attractive cost.
Source: Oils & Fats International
