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Trade4go
Apr 18th, 2025
Original content
European Union (EU) oilseed processing fell to a three-year low in early 2025, with total volumes down 8% year-on-year (YoY) to 8 million metric tons (mmt) in Jan-25 and Feb-25. Soybean processing saw the sharpest decline, dropping 20% YoY to 2.62 mmt, with notable reductions in Bulgaria, France, Romania, Poland, and Hungary. The decline was driven by market instability and weakened demand for processed oilseed products. While current conditions remain subdued, analysts suggest processing levels could recover in the second half of the year if prices stabilize and demand improves.
Soybean oil prices in Bangladesh have risen sharply following the expiration of reduced import duties on edible oil. As of April 13, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association (BVORVMA) increased the retail price of one-liter bottled soybean oil by USD 0.12 per liter (BDT 14/L) to USD 1.56/L (BDT 189/L). Five-litre bottles now cost USD 7.59/5 L (BDT 922/5 L), while loose soybean oil rose to USD 1.39/L (BDT 169/L). The price adjustment follows a proposed hike ahead of Eid and reflects higher import costs after tax concessions ended on March 31. Despite recommendations from the Trade and Tariff Commission (BTTC) to extend the duty relief until June 30, the National Board of Revenue (NBR) has yet to decide.
Ukraine continues to strengthen its position in the global soybean market, supported by a record harvest and sustained domestic processing. As of April 1, soybean exports reached nearly 93,000 metric tons (mt), with domestic stocks at 2 mmt—up from 1.8 mmt in 2024. High demand for soybean oil from European buyers has helped maintain soybean prices at USD 423.92 to 431.18/mt (UAH 17,500 to 17,800/mt), supporting processor margins despite softer global importer activity and tariff uncertainties between the United States (US) and EU.
European interest in Ukrainian soybean oil remains strong, offering potential for further export growth if trade tensions between the US and EU escalate. Meanwhile, US soybean competitiveness is under pressure, with corn acreage expected to decline in favor of soybeans. Price levels remain stable globally, with soybean offers at deepwater ports holding around USD 385 to 390/mt. Overall, Ukraine is well-positioned to expand its presence in the European soybean oil market amid steady global trends.
The United States Department of Agriculture's (USDA) Apr-25 World Agricultural Supply and Demand Estimates (WASDE) report revised US soybean oil usage for biofuel in 2024/25 downward by 200 million pounds (lbs) to 13.25 billion lbs, reflecting slower current usage. Despite the reduction, soybean oil prices were revised upward to USD 0.45/lb, driven by expectations of stronger demand later in the year due to tariffs on alternative biofuel feedstocks. The US soybean crush is projected to rise to 4.42 billion bushels, supported by higher soybean meal demand and increased soybean oil export commitments. As a result, soybean oil exports were revised upward, and ending stocks for soybeans were lowered to 375 million bushels.
In W15, Argentina's soybean oil prices declined slightly to USD 1.02 per kilogram (kg), a 0.97% week-on-week (WoW) drop, though still 13.33% higher YoY from USD 0.90/kg. This minor weekly correction comes amid strong export performance and relatively high domestic availability. The price softness likely reflects short-term supply confidence, as Argentina concluded the 2023/24 season with historically high crush volumes and record exports of 6.4 mmt. However, the projected drop in soybean oil output to 8.2 mmt for 2024/25 driven by reduced harvest and limited Paraguayan imports could tighten supply in the months ahead. Despite this, expected high carryover stocks and only a moderate decline in output, still well above the five-year average, may keep prices stable in the near term.
Brazil's soybean oil prices rose to USD 1.14/kg in W15, a rise of 1.79% WoW and an 11.76% YoY increase. This price increase reflects growing domestic demand amid expanding biodiesel production, which continues to divert supply away from export markets. Despite record production of nearly 12 mmt projected for 2024/25, Brazil's soybean oil exports remain constrained at around 1.3 mmt. This is due to the rapid growth of domestic industrial consumption, particularly for biodiesel, which has more than doubled over the past decade. While the National Energy Council (CNPE) temporarily paused the scheduled biodiesel blend rate increase (maintaining it at 14% instead of 15%), biodiesel production remains a key driver of internal demand. Due to strong domestic demand and limited export supply, Brazil’s soybean oil prices are likely to stay firm. Further gains are possible if global vegetable oil supplies remain tight, with little relief expected unless production outpaces internal use.
US soybean oil prices declined to USD 1.01/kg in W15, a 1.94% WoW decrease and 8.60% month-on-month (MoM) rise, driven by steady domestic demand amid tightening export prospects. Rising trade tensions with China, including new tariffs and import bans, are curbing overseas sales, keeping more supply in the US. The US remains heavily reliant on soybean exports, with over 40% of its 2024 production shipped abroad—more than two-fifths to China. However, recent tariff hikes and China's 84% retaliatory duties, along with import suspensions on key US suppliers, have disrupted this trade flow and increased domestic supply pressures. While soybean oil demand has grown, especially for renewable diesel, the US market has limited capacity to absorb surplus production. Without alternative export outlets or a slowdown in crushing volumes, this imbalance may limit further price gains. With South America, particularly Brazil, expanding output and strengthening its position in China, US soybean oil prices are likely to remain volatile. Sustained trade friction and oversupply risks may weigh on prices in the medium term despite near-term support.
In W15, soybean oil prices in the Netherlands rose to USD 1.24/kg, marking a 1.64% weekly increase and a substantial 29.17% rise YoY. The gain reflects firm domestic and regional demand amid tightening global supply conditions and mounting trade tensions. As the Netherlands remains one of the EU's key importers of US soybeans, the EU's newly approved retaliatory tariffs, targeting American agricultural goods including soybean, could disrupt traditional trade flows. If implemented, EU tariffs on US soy could reduce supply to the Netherlands, supporting higher soybean oil prices. While Brazil may offset some losses, limited short-term alternatives could keep Dutch prices elevated, though sustained increases may later curb demand.
Given the challenges in the EU's oilseed processing and the rising soybean oil prices in key markets like Bangladesh, businesses should consider diversifying their sourcing strategies to reduce risks associated with supply instability. By engaging suppliers from regions with less volatility, such as Ukraine and Brazil, companies can minimize reliance on markets facing trade uncertainties and lower production levels. Securing long-term contracts with suppliers in diverse regions can provide more stable and predictable sourcing, especially in light of EU tariff shifts and price increases.
With soybean oil prices rising across various markets, including Bangladesh and the Netherlands, businesses should reassess their pricing strategies. Companies in retail and food production should consider introducing tiered pricing models or smaller packaging sizes to manage customer affordability while maintaining profitability. Additionally, offering value-added products, such as packaged cooking oils or blended oils, could cater to consumer segments more sensitive to price hikes. These approaches can help mitigate the impact of price volatility on demand.
With Ukraine increasing its soybean exports and Brazil’s internal demand for soybean oil driving up domestic prices, companies should closely monitor export opportunities in emerging markets. As the US faces trade tensions and limited export prospects due to tariffs, businesses should focus on strengthening relationships with countries like Ukraine, where soybean oil demand from Europe remains strong. Staying informed about global market shifts and regulatory changes will enable businesses to capitalize on new opportunities while managing risks tied to export disruptions.
Sources: Tridge, Grain Trade, Sinor, ChemAnalyst, The Financial Express, El Litoral, Feed and Grain, Investigate Midwest, Eljazeera
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