In this report, we answer the top three questions we’re hearing from the market:
Geopolitical instabilities, extreme weather and political decisions driven by inflationary pressures are all contributing to today’s vegetable oil crisis.
As climate change becomes more tangible and periods of draught more frequent, major vegetable oil producers struggle to meet export and domestic demand, with yields being challenged and forecasts uncertain.
Importers, who have previously relied on sunflower oil supply from Ukraine, are now cautious in their purchases and concerned because, despite the recent free grain corridor agreement, shipments from the Black Sea may still struggle to depart while the war continues.
And the crisis expands to all agricultural commodities, not just oils.
A shortage in fertilizer, exported mainly from Russia, means that corn and wheat are also difficult to grow and may have to be substituted with crops that require less nourishment, like soybeans. US and Canadian farmers have already started to adapt to this.
With optimistic production forecasts for soybeans, at least in North America, soybean oil is a good candidate to alleviate the scarcity of other vegetable oils and is the most significant feedstock option for biodiesel.
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