Global Market Outlook on Soybean Oil

  • The global soybean oil supply has been witnessing a steady growth of 5.2 percent CAGR during 2012/13–2017/18 crop years. The current crop year (2018/2019) production is expected to increase by 3.7 percent against the previous crop year (2017–2018).
  • Despite higher soybean planting areas, the estimated production is low year-on-year, owing to unfavorable La Nina weather conditions, which is said to impact the production and seed quality
  • Deficient of rapeseed oils supported the soybean oil demand in the food and biodiesel market in 2017/2018.

soybean-oil-market-size

Price Benchmarking

  • Soybean oil prices and contract structures are fixed by the US suppliers using CBOT future and adding the basis & freight costs 
  • The basis is the difference between cash and future prices. Profit margin set by the buyers depends on time of buying & selling and also on the soybean prices
  • Soybeans supply scenario, and crush margins play a major role in driving the prices of soy oil

Soybean Oil Value Chain

  • Soybean oil value chain and prices are driven using by-product, raw materials supply, and crushing economies. ~89 percent of the soybean produced globally is used for the purpose of crushing, out of which 18 percent of oil and 82 percent meal are obtained 
  • Despite the low share as a by-product, soybean oil prices play a major role in the pricing economies of soybean value chain, due to its utility in end-use demand

Global Soybean Oil Supply–Demand Analysis

  • Soybean oil supply witnessed a consecutive increase for the last three years, due to increased soybean supply and tightened supply in the other vegetable oil market, mainly the rapseed oil market 
  • Recovery in the biodiesel demand has also supported the soybean demand during the start of 2018

Market Outlook - 2017/2018

  • Global production and consumption of soybean oil from 2013/14 to 2017/18 grew at a CAGR of 5.6 percent and 5.9 percent, respectively 
  • The global production and consumption are expected to grow at 4.6 percent and 4.1 percent, respectively, for 20118/19 compared to the previous year 
  • The accelerated consumption growth of soybean oil in China will drive the production increase 
  • Major soybean oil producing regions are China, Argentina, and the US, which account for ~63 percent of the global soybean oil production

Soybean Oil Global Demand by Application

  • The global soybean oil demand witnessed a steady increase in the recent decade, due to increasing share of demand from the food industry
  • The main demand for soybean oil is for food application, followed by industrial use, which is for biodiesel manufacturing
  • The global biodiesel production from soybean oil in 2018 is estimated at 10.2MMT, which is 6.8 percent higher than the previous year

Soybean Oil Consumption by Country

  • China, the US, and Brazil are the largest consumers of soybean oil
  • China is the largest producer and consumer of soybean oil. China consumes almost approx. 99 percent of the domestic production
  • Brazil, Argentina, and the US are major soybean producing areas.China imports 64 percent of the global soybean to produce the soybean oil