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Trade4go
Mar 7th, 2025
Original content
Soybean oil imports into the European Union (EU) rose 8% in the first quarter (Oct-24 to Dec-24) of the current agricultural season, reaching 660,000 metric tons (mt). This increase partially offset declines in rapeseed, sunflower, and palm oil consumption. A record 330,000 mt of soybean oil was imported from Ukraine, a 37% year-on-year (YoY) increase, while imports from Argentina fell 25% YoY to 140,000 mt. Despite higher soybean oil imports, overall EU vegetable oil imports dropped 14% to a 12-season low of 1.38 million metric tons (mmt) amid declining domestic production and consumption.
Argentina's Union of Oilseed Workers and Employees (SOEA) has threatened to join a nationwide strike if Vicentin, a bankrupt soybean processor, fails to pay Feb-25 wages. Once Argentina's top exporter of soybean oil and meal, Vicentin has been in bankruptcy proceedings since 2020 after defaulting on over USD 1 billion. The SOEA union stated that Vicentin warned of potential non-payment of wages. A Santa Fe court recently invalidated a creditor agreement, halting new contracts to lease Vicentin's facilities, further complicating operations at its headquarters and processing plants.
In Bangladesh, soybean oil imports are expected to reach 129,000 mt, approximately 140 million liters (L), within the first week of Ramadan, beginning on March 1. Five tankers carrying 78,000 mt have already arrived at Chittagong Port, with another 51,000 mt expected shortly after.
Despite a six-year high in soybean oil imports in Jan-25 amounting to 117,000 mt, there were only limited arrivals in Feb-25, leading to supply shortages. Importers expect the crisis to ease as shipments are refined and marketed rapidly. Additionally, soybean seed imports are projected to yield at least 25,000 mt of soybean oil, further stabilizing supply.
Soybean oil shortages have intensified in major markets across Bangladesh, with bottled varieties becoming scarce due to surging demand ahead of Ramadan. Distributors and shopkeepers report that oil refineries have been supplying less than required for the past month, exacerbating the crisis. In key markets such as Kawran Bazar, Chattogram, Khulna, and Narayanganj, bottled soybean oil has become difficult to find, leading to inflated prices. While the official maximum retail price is USD 1.44 per liter (BDT 175/L), non-bottled soybean oil is being sold at USD 1.56 to 1.65/L (BDT 190 to 200/L) in various locations. Retailers and distributors continue to struggle with supply constraints, further straining availability.
Argentina's soybean oil prices fell to USD 1.06 per kilogram (kg) in W9, down 3.64% week-on-week (WoW) but up 6% month-on-month (MoM) from USD 1/kg. The decline suggests a temporary easing in market pressure, though underlying risks remain. The threat of a nationwide strike by the SOEA union raises concerns about potential supply disruptions. Vicentin faces legal and financial constraints, limiting its operational capacity. If the strike proceeds or disruptions escalate, short-term price volatility could increase, possibly reversing the recent price drop. This could tighten global supply, affecting future prices, particularly if Argentina's exports decline.
Brazil's soybean oil prices declined slightly in W9 to USD 1.19/kg, down 0.83% WoW but still 19% higher YoY. The drop was mainly due to weaker domestic biodiesel demand after the government maintained the biodiesel blend at 14% instead of increasing it to 15%, curbing expected demand growth. In addition, record soybean harvests added downward pressure on prices. In the short term, lower prices could enhance Brazil's export competitiveness, potentially affecting global soybean oil markets. However, if policymakers revise the blend mandate, demand may rise, reversing the current trend and pushing prices higher.
The United States (US) soybean oil prices rose to USD 0.99/kg in W9, reflecting a 3.88% WoW rise, while maintaining a modest 1.02% YoY gain. Looking ahead, the United States Department of Agriculture's (USDA) Feb-25 Grains and Oilseed Outlook projects a slight increase in US soybean production for the 2025/26 season, with yields expected to grow by 1.8 bushels/acre to 52.5 bushels/acre. However, a reduction in planted acreage by 3.1 million acres, totaling 84 million acres, will limit production growth. Despite this, soybean crush is forecasted to rise by 65 million bushels to 2.48 billion, driven by higher demand for soybean oil in biofuels and exports. Biofuel consumption of soybean oil is expected to increase by 400 million pounds (lbs), contributing to upward pressure on soybean oil prices, even as overall production growth remains modest. This trend suggests that current price increases may stabilize, but biofuel demand could sustain upward price momentum in the medium term.
In W9, soybean oil prices in the Netherlands rose to USD 1.15/kg, up 4.55% WoW and 27.78% YoY. As a key European trade hub, the country relies on imports for over 99% of its soy supply, with the Port of Rotterdam playing a central role in re-exports across Europe. The recent price increase reflects both rising global soybean oil costs and strong regional demand. Future price movements will be influenced by South American supply flows, European biodiesel market dynamics, and broader economic conditions. If biodiesel demand weakens or exports from Brazil and Argentina remain strong, prices may stabilize or decline. However, supply chain disruptions or shifts in European renewable energy policies could drive prices higher.
Spain's soybean oil prices declined to USD 1.42/kg in W9, down 1.39% WoW but still 21.37% higher YoY. The decrease aligns with weaker soybean meal prices and global oil market fluctuations. Factors such as strong Brazilian production, easing geopolitical tensions, and US trade policies have influenced oilseed markets. Looking ahead, price trends will depend on biodiesel demand, South American export levels, and potential shifts in European trade policies. If supply remains abundant and meal prices continue to weaken, soybean oil prices in Spain may face further downward pressure. However, disruptions in energy markets or changes in import tariffs could reverse this trend.
The EU's increased reliance on Ukrainian soybean oil, amid declining imports from Argentina, highlights the risk of supply disruptions. EU processors should explore diversifying import sources, including alternative suppliers from Brazil and the US, to reduce dependency on a few markets. Developing long-term trade agreements and increasing regional storage capacities can also help mitigate potential supply chain vulnerabilities.
The threat of a strike by Argentina’s soybean workers and Vicentin's financial instability could lead to price volatility. Importers and processors should closely monitor the situation and consider securing additional soybean oil stocks from alternative suppliers to hedge against potential price spikes or supply shortages. Forward contracting and building strategic partnerships with reliable producers can help stabilize supply and costs.
US soybean oil prices are rising due to increasing biofuel demand. Producers should focus on expanding their export opportunities, particularly in markets where biofuels are in high demand, such as Europe and Asia. Strengthening ties with biofuel producers and exploring new regulatory incentives for biofuel consumption can further support price growth and expand market access for soybean oil exports.
Sources: Tridge, Noticias Agricolas, Sinor, Biomass Magazine, Prothom Alo, The Daily Star
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