European vegetable oil prices slide on corridor extension

Prices for rapeseed and sunflower oil at European ports weakened on November 17 following news that the grain corridor in the Black Sea will be renewed for another 120 days, thus lifting the uncertainty over supply, at least in the short term.

Fastmarkets’ APM-26 Rapeoil FOB Dutch Mill Rotterdam was assessed €1,287.5 per tonne for January loading on Thursday, November 17, down €18 per tonne on the previous day and down €110 per tonne since the beginning of November.

So far this year, rapeseed oil prices have fallen by over €830 per tonne FOB from a peak of €2,120 per tonne recorded on May 23, as a higher-than-expected rapeseed crop in Europe this season eased tight availability seen before the crop harvest.

Furthermore, a record-high rapeseed crop for the upcoming season in Australia, from which the EU (according to EU data) imports 52% of its total requirements, has further relieved the pressure on rapeseed oil prices.

Sunflower oil prices

Meanwhile, the Sunoil FOB Six Ports assessment for January loading was valued at $1,305 per tonne FOB on November 17, shedding $50 per tonne since the start of the month.

“This week, so far, global veg oil markets experienced a sell-off in expectations that the Black Sea Grain Corridor deal will be extended, and it finally happened today,” Anilkumar Bagani, research head at Mumbai-based vegetable oil broker Sunvin Group, told Fastmarkets Agriculture.

“Although the markets have mostly priced in for the outcome, the resumption of Ukrainian Sun oil offers, due to clarity over the corridor, would push the prices further down,” Bagani added.

But, despite the news, prices for sunflower oil in Ukraine were practically unchanged. The market lacks clarity on how the corridor will work in the future and whether the port of Mykolayiv will be included.

According to market sources, long cargo inspection delays have slowed operations through the corridor, but if the inspection process is accelerated, prices are expected to fall.

There is currently vessel congestion in Istanbul. The pace of inspections for outbound and inbound cargoes is set at a target of around ten vessels per day, but the actual rate is much lower.

The extension of the grain corridor was announced on Thursday, November 17, in an official notice from the Ukrainian ministry of infrastructure, which stated that the “Initiative for safe transport of agricultural products across the Black Sea is extended for another 120 days”.

Since the beginning of the 2022-23 season, exports of sunflower oil from Ukraine have exceeded 1.2 million tonnes, according to the Ministry of Agriculture and Food of Ukraine.

For more information on the current veg oils market, take a look at our dedicated page for vegetable oil prices.