Uncompetitive soyaoil prices and tight export supplies are pushing consumer demand towards cheaper palm oil and sunflower oil, Hamburg-based oilseeds analysts Oil World said on Tuesday. Soyaoil has lost price competitiveness against palm and sun oil, Oil World said. Palm oil is currently about $100 cheaper than US fob soyaoil prices and $60 cheaper than Brazilian and Argentine soyaoil, Oil World data shows.
"Several importers in the consuming countries have thus neglected soyaoil, taking advantage of the record supplies of palm oil in Southeast Asia and of sunflower oil in the Black Sea locations," Oil World said. "The resulting record world palm oil exports will reduce stocks in the origin countries below expectations at the end of November."
"The strong demand and the now seasonally declining production have created a bullish situation for palm oil." Palm oil prices have been falling because of concerns the debt issues in Europe and United States may stall global growth and so commodity demand.
But weak global soyaoil output will push more demand to palm oil which could be price-supportive, Oil World said. Global October-December 2011 soyaoil output will rise by about 3 percent on the year but this is below average and below expectations, it said. "Lower meal demand is likely to be the major (soyaoil production) constraint, it has squeezed margins and slowed soyabean crushings below expectations in the US, Argentina, Brazil and Europe," it said.
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