With BOPO (Bean Oil Palm Oil) still at negative $11 after falling $30 today, it shows how volatile the current situation is with palm oil, as India's imports of cheaper soyoil are forcing recent cancellations of 100Kt of crude palm oil contracts by Indian refiners and even Malaysia to reconsider their blending mandates because of the cost of infrastructure. This decision by Indian refiners may not just be because of pricing but also threats of new additional duties on vegetable oil imports by the Indian government. With the harvest in Brazil now reaching nearly 70% of a monster crop of 170 million MT, there is very little hurry for anyone to cover vegetable oil needs. It is also expected that in the period Jan/Aug 2025, US exports of soybeans could fall by 5 million MT vs. the Q4 6.1 million MT increase. This could have a serious impact on soybean prices and soyoil in the US. In Europe, there is increasing worry that the postponement of the EUDR (deforestation legislation) has had an impact on the increasing planted hectares in Brazil, as this year's crop is at least 4.3 million metric tons higher than last year, corresponding to an additional 1.3 million hectares (3.2 million acres), which is about the size of Uruguay. Trading post-elections in Germany was thin today as the Green Party, together with centrists, took a major defeat. In soft oils, rapeseed took the largest setback today, widening the gross margin for RME to $133/mt, while FAME 0 reflected a gross margin of $129/mt. UCOME gross margins have declined to $211/mt based on pretty stable ARAG pricing of UCO CIF ARA at $1080/mt. SAF is being shown at $1010/mt over ICE Gasoil, while HVO class 2 (made from UCO) is being shown at +929/mt over ICE, essentially highlighting the issue of risk associated with the lack of duty on SAF from China in case of re-grading for the product as HVO if it fails to meet jet fuel specifications. This has triggered a new proposal report by EBB to reinforce the EU system for verification of sustainable fuel report.
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