During the last month, demand and prices for vegetable oils have been gradually increasing due to the export blockage from Ukraine and reduced forecasts for rapeseed in the EU and soybean in the US due to drought. Therefore, traders closely monitored the results of the Egyptian tender for food procurement, which served as an indicator of price trends.

On July 26, the Egyptian state operator GASC purchased 45,000 tons of vegetable oils, including 33,000 tons of sunflower oil at a price of $1080/ton C&F from the following companies:

• 12,000 tons from TOI Commodities with delivery between August 6 and August 20,
• 10,000 tons from Oliva AD with delivery between August 6 and August 20,
• 5,500 tons from Aston Agro Industrial with delivery between August 6 and August 20,
• 5,500 tons from Aston Agro Industrial with delivery between August 20 and September 5.

In addition, LDC purchased 11,875 tons of soybean oil at a price of $1150/ton C&F with delivery between August 20 and September 5.

The purchase price of sunflower oil was $154/ton higher, and soybean oil was $102/ton higher compared to the previous tender on June 13. The volume of purchased oil tripled, indicating GASC’s unrealistic expectations of price reductions ahead of the new season.

The number of bids submitted at the tender also increased. GASC received 6 offers for sunflower oil at prices ranging from $1114 to $1196/ton, and 8 offers for soybean oil at prices ranging from $1200 to $1259/ton.

High prices for soybean and sunflower oil are due to reduced supplies from Ukraine, the US, and Argentina, along with decreasing soybean and sunflower stocks and lower soybean crop forecasts in the US for the new season.

Yesterday, on the Chicago Exchange, September soybean oil futures fell by 1.8% to $1450/ton (after a 10% increase over the week), and December futures fell by 1.8% to $1370/ton (+11.9% for the month).