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Soybean oil prices break 7-year record

Posted by Marina

Port soybean oil prices rose to the highest levels in the past seven years this week, with tight supply in the Brazilian domestic market, with the premium for Argentine soybean oil hitting a record high - a move that is likely to attract more soy oil imports. The information was released by T&F Consultoria Agroecômica.

“Brazilian soybean oil based on FOB Paranaguá for November shipment was traded at a record premium of 9.00 ct / lb over the December CBOT contract on Wednesday, equivalent to $ 923.25 / t FOB and its highest level since May 2013. It has increased $ 135 / t since the beginning of this month. Cargo in neighboring Argentina - the world's largest soy oil exporter - for the equivalent is traded at a premium of 3.50 ct / lb, or $ 802 / mt FOB Up River, an increase of $ 45 / t in the same four weeks ”, he comments.

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This means that Brazil's usual $ 10 / t premium on Argentine soy oil has risen to a record $ 121.25 / t, as the domestic market no longer has soy oil while demand has increased. "The buyer sells the volume back to the domestic market, if the oil is not yet in the port. The domestic base is being traded at +1500 ct / lb equivalent FOB Paranaguá," said a Brazilian broker to T&F.

“After a record soybean export season, driven by Chinese demand earlier this year, Brazil - the world's largest producer of oilseeds - has little supply until its next harvest, in February next year. At the same time, demand for soy in Brazil - the third largest diesel consuming nation in the world - has seen an increase in demand for soy-based biodiesel, despite measures to restrict the spread of Covid-19, as more than 95% of all goods in the country are transported via roads ”, he concludes.

Source: Agrolink