About: Soybean or better known as the soya bean is a species of legume native to East Asia. It is extensively grown for its edible bean, that comes with several benefits. The conventional unfermented food uses of soybeans include soy milk, from which tofu and tofu skin are prepared or can be produced or prepared. Fermented soy foods include soy sauce, fermented bean paste, natto, and tempeh.
Get the latest insights on price movement and trend analysis of Soybean Oil in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).
Soybean Oil prices tend to fluctuate globally as it is influenced by several factors both domestic and geopolitical. The Indonesian government imposed a historic ban on palm oil exports (as of 28 April 2022) to stabilize the domestic crisis. Hence, a huge void was created in the market with the governments looking for substitutes.
As a result, prices of other domestic oils such as soybean oil rose to a consequential high. Due to the mismatch between the demand and supply the market dynamics shifted with the record price of 1630.80 USD/MT (29 April 2022) and averaged the second quarter at 1518.83 USD/MT for India.
China is a net importer, even being one of the biggest producers of the commodity. The country almost entirely exhausts its domestic supply and relies heavily on imports.
However, amidst the ongoing crisis, the price trend of soybean oil was stable due to the fall in demand by downstream sectors. As per the market data, soybean oil prices averaged 9232.66 RMB/MT ($1370.50 approx.) for the current quarter.
Following the Russia-Ukraine conflict, Europe is now looking for alternatives to meet the growing domestic demand. Also, to meet the new blending requirements, the EU is trying to expand its portfolio and has increased the imports of soybean oil.
EU soybean oil imports increased to 6.95% than the previous year amounting to 496,453 MT as of June 2022.
For countries like the USA, domestic demand plays an important role in setting the price trends for soybean oil along with the international scenarios. The latest biodiesel and biofuel policy released by the US administration has led to increased demands by the industries, creating supply issues in the domestic market and driving soybean oil prices.
With the Russia-Ukraine conflict, the world is deprived of the black sea sunflower oil, thereby creating more demand for soybean oil in the USA. Currently, soybean oil price stands at 0.7012 USD/lb or 1545.87 USD/MT- more than a third rise for the price of the commodity in the domestic market. However, due to the speculations about the recession and the uncertainty regarding the US soybean harvest, the prices are likely to stabilize.
Soybean oil prices reached a record-breaking high in this quarter. The worsened domestic supply along with the lack of substitutes caused the prices to skyrocket to 1900 USD/MT surpassing all the historical data recorded. Heat waves and subsequent droughts destroyed the soybean harvest leading to shortages in the market.
As of 28 April, the Argentinian FOB Up River soybean oil was priced at 1,909.20 USD/MT and the Brazilian FOB Paranagua was priced at 1,902.59 USD/MT. These prices are likely to grow due to the disrupted black sea sunflower oil from Ukraine and the export ban by Indonesia.
The external oil market expanded rapidly during the Qingming vacation, fueled by the crude oil market. Following the festival, the soybean oil futures market expanded significantly, and the spot market followed suit. The soybean oil market was expected to remain strong in the short term. On the other hand, the soybean oil and palm oil markets rose on March 24th. Soybean oil averaged 11,146 RMB/MT, up 2.73 percent in a single day, while palm oil averaged 12,994 RMB/MT, up 1.44 percent.
CBOT soybean futures hit 17.65 USD/bushel in Q1 2022, just 29.75 cents lower than the 2012 peak. The price had risen above the 16.70 USD barrier, according to quarterly price momentum and relative strength indicators. Soybean futures rose 21.79 percent in the first quarter, closing at 16.1825 USD/bushel on March 31st. A poor harvest in South America has kept prices stable in recent months, pushing soybeans to an 11-year high in Q1 2022.
Soybean oil prices in South America have risen to historic highs, breaking through the 1,900 USD/MT barrier for the first time due to a scarcity of edible oils, with market participants expecting further increases. FOB prices in Argentina and Brazil have been rising since late February, when Russia's invasion of Ukraine disrupted Black Sea sunflower oil supplies, driving global edible oil prices sharply higher amid already tight stocks. The latest boost to this upward trend came from Indonesia, the world's largest producer and exporter of palm oil, which banned shipments of crude and refined palm oil products on April 28 to combat rising domestic cooking oil prices.
India (USD 3 billion) is the world's largest importer of soybean oil, accounting for 29% of total imports. China (USD 725 million) came in second place, accounting for 7% of the overall value.
Soy oil's increased use in the manufacture of shortenings, margarine, and salad dressings in Europe and North America has also contributed to its rising demand. The increased demand for edible oils in the biofuel industry increased market demand in the fourth quarter of the year.
In the fourth quarter of 2021, the average US crude soybean oil price in North America was 1386 USD/MT. Because of growing concerns about nonrenewable energy sources, biofuel has become a thriving industry. Governments in North America were making significant investments in biofuel production. The increased biodiesel production capacity had a significant impact on global demand for soybean-derived oil. Because it has a higher BTU value and burns more efficiently and cleanly, the oil is used as a feedstock for biodiesel production. The US government provides a dollar-per-gallon subsidy to biodiesel companies that use virgin vegetable oil as a feedstock.
Despite the fact that Brazil, the world's largest soybean producer, increased harvested area by 4% over the previous year, dryness significantly reduced yields. Brazil's soybean output is expected to fall 3% year on year to 134 MMT.
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Procurement Resource provides Soybean Oil prices for several regions around the globe, which are as follows:
In this process, first soybeans undergo cracking process and then heated at a temperature ranging between 60-88oC or 140-190 °F. These are further rolled into flakes and solvent-extracted with hexanes. The oil obtained is finally refined and blended for distinct applications, and often hydrogenated.
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The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).
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