(Feb 9): Chicago soybean oil rose to its highest level in more than six months, driven by hopes that India will buy more after proposing to open parts of its agriculture market to cheaper US imports.
India agreed to cut or eliminate import duties on a slew of US agricultural products, including soybean oil, according to a joint statement on the framework for an interim trade deal released late Friday (Feb 6) in the US. That followed an announcement made last week by US President Donald Trump that India would buy over US$500 billion of US products, including agriculture.
The most actively traded soybean oil contracts on the Chicago Board of Trade surged as much as 1.9% to the highest since July during intraday trading, extending last week’s rally after Trump first announced the deal.
The South Asian nation is the world’s largest edible oil importer, buying around 16 million tonnes of seed oil annually, mainly palm, soy and sunflower oil from producers in Southeast Asia and South America. Soy oil imports from the US are relatively marginal, totalling some 200,000 tonnes in the January-November period last year. The trade deal with the US could allow American supplies to gain market share from other major exporters and curb demand for competing edible oils.
Soy oil prices in the US may rise further once details of the deal are finalised and the agreement could see India scaling back purchases from South America, according to Sandeep Bajoria, chief executive officer of Sunvin Group.
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Meanwhile, the most traded palm oil futures on Bursa Malaysia Derivatives were steady at around RM4,184 per tonne.
The near-term outlook for palm oil remains positive as prices are still about $100 cheaper than soy oil, Bajoria said. Futures may trade between RM4,050 and RM4,450 through the end of March, he added.
Prices:
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- Chicago soybean oil futures rose 1.6% to 56.20c/lb as of 1.04pm Singapore time.
- Palm oil on Bursa Malaysia Derivatives was up 0.72%.
- Soybeans, corn, and wheat were all down.
Uploaded by Arion Yeow
