Prices for rapeseed and soybean oil are converging again. Palm oil continues to be low-priced, but the price gap against the other vegetable oils has narrowed significantly in the wake of the past few weeks’ sharp price rise.Prices for soybean oil have returned to almost the level of rapeseed oil prices following their surge on the European vegetable oil market mid February 2016. The rise was based on firming feedstock prices in Chicago. At EUR 702.50 per tonne, rapeseed oil for nearby delivery fob Hamburg most recently only cost EUR 6.50 per tonne more than soybean oil. Palm oil prices also moved considerably closer to those of rapeseed, reflecting their past weeks’ nearly ten per cent surge. At recently EUR 116 per tonne, the palm oil to rapeseed oil spread has narrowed by half since the beginning of the year. The palm oil price rally has been driven by prospects for limited supply in the most important palm oil producing countries in 2016 due to poor growing conditions caused by El Niño. These expectations temporarily sent palm oil prices in Kuala Lumpur to a 21-month high.
Source: UFOP, press release, 2016-02-26.