Soybean oil prices at ports rose to their highest levels in seven years this week as supply tightened in the Brazilian domestic market, with the premium for Argentine soybean oil hitting a record high – a move likely to attract more soybean oil imports. The information was released by T&F Consultoria Agroeconomia.
“Brazilian soybean oil based FOB Paranaguá for November shipment traded at a record 9.00 ct/lb premium over the December CBOT contract on Wednesday, equivalent to US $ 923.25/t FOB and its highest level since May 2013. Increased US$ 135/t since the beginning of this month. Cargoes in neighboring Argentina – the world's largest exporter of soybean oil – for the equivalent are trading at a premium of 3.50 ct/lb, or US$ 802/mt FOB Up River, an increase from US$ 45/t over the same period four weeks”, he comments.
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This means Brazil's usual premium of US$ 10/t over Argentine soybean oil has risen to a record US$121.25/t, as the domestic market runs out of soybean oil while demand increases. “The buyer sells the volume back to the domestic market, if the oil is not already at 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 at the beginning of this year, Brazil – the world's largest producer of the oilseed – has little supply until its next harvest, in February next year. At the same time, demand for soybeans in Brazil – the world's third-largest diesel-consuming nation – has seen an increase in demand for soybean-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
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