Global vegetable oil prices are projected to rise in the coming months and extend their upward trajectory into 2027, driven by a tightening supply environment, persistent disruptions in Black Sea shipping corridors, and declining South American exports, according to industry analyst Thomas Mielke.
Speaking on the sidelines of the Globoil conference in Mumbai, Mielke, Executive Director of Hamburg-based forecaster Oil World, warned of significant supply shortfalls if maritime logistics in Eastern Europe remain compromised.
Key Market Drivers & Insights
- Black Sea Supply Bottlenecks: Sunflower oil exports from Russia and Ukraine could drop by 300,000 to 350,000 metric tons per month below potential starting in October unless a secure shipping corridor is established following recent military strikes on regional ports.
- Shift to Palm Oil: India, the world’s largest edible oil importer, is expected to face the brunt of these disruptions. A recent price correction has made palm oil increasingly competitive, prompting major buyers to pivot toward palm oil to replace delayed sunflower oil shipments.
- Declining Soyoil Output: South American soyoil exports have passed their seasonal peak and are set to drop starting in October, further constraining world supply as global demand—particularly for biodiesel amid elevated energy prices—continues to outpace production growth.
- Policy & Tariff Adjustments: To ease domestic cost pressures and secure adequate supplies, India recently slashed its basic import duty on crude sunflower oil from 10% to zero while simultaneously considering duty cuts on pulses.
