October, 2024
Lasenor is actively present in the main sourcing areas for NON GMO lecithin. We will offerregular insight on its evolution as a diagnostic tool.
In the Q1 2024 edition, we mentioned that some buyers had only fulfilled part of their 2024 needs, hoping for further adjustments in Q2 2024. The July-August period, traditionally calm, saw no significant movement. Regarding sunflower lecithin, there has been a greater-than-expected price decrease due to ample supply in the current season. Higher-than-expected crushing and processing rates drove this. The premium of sunflower lecithin compared to Indian Non-GMO soya lecithin, valid in Q1 2024, has significantly reduced. Sunflower lecithin is now quoted at the same price level as non-GMO IP soya lecithin in Europe. Conversely, major vegetable oils experienced an uptrend during Q2 & Q3 2024, supported by a bullish supply outlook and reduced stocks at the start of the season.
The monsoon in India is progressing well. Key soybean production regions, Madhya Pradesh and Maharashtra, received abundant rainfall, leading to expectations of a good crop. However, it is still too early to estimate the crop yield as the monsoon is still ongoing.
In addition to soybean production, three key factors need to be considered:
In such a configuration, it seems there is no room for further price reductions. Conversely, decreased sales of soya meal result in reduced crushing, leading to lower soya oil and, consequently, lower soya lecithin production.
The EU rapeseed harvest is lower this year due to an 8% decrease in plantings compared to last year and unfavourable weather conditions. The estimated crop for 2024 is 17.3 million tons (MnT).
Currently, global sunflower seed production is facing a deficit of approximately 5 million tons, leading to a reduction in crushing of at least 3.4 million tons. The most significant decrease in processing will occur in Russia and Ukraine.
After analyzing the market fundamentals, there is a mismatch between the current prices of non-GMO lecithin and the expected supply of sunflower and rapeseed lecithin. Furthermore, a decrease in crushing is anticipated in India, which means that soya oil and lecithin will need to maintain firm prices to compensate for the lost crush value on the soya meal.
The bullish impact of the poor crops has been undervalued over the past three months. In the upcoming months, it would not be a surprise to see less non-GMO lecithin availability in the coming months, leading to a moderate upward pricing.
At Lasenor, we are committed to closely monitoring market dynamics, providing timely insights, and offering comprehensive support to help you make well-informed decisions. We welcome the opportunity to collaborate with you and help you realize the full potential of your products in this changing market.
Article Sourced from Lasenor
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