Key facts
- Global vegetable oil prices hit their highest point since July 2022 in April.
- Rising energy prices and demand for biofuels are boosting vegetable oil markets.
- China has halted soybean imports from the U.S. and rapeseed imports from Canada due to retaliatory tariffs.
- Ukraine introduced a 10% export duty on soybeans and rapeseed.
- Chicago soybean futures climbed 3% between August 20 and mid-September.
- U.S. Gulf FOB soybean oil prices rose 1% to $409/ton.
Global oilseed markets are facing significant pressure from a combination of oversupply, geopolitical tensions, and policy changes that are disrupting trade flows and affecting prices. U.S. and Canadian soybean and rapeseed harvests in late 2025 have weighed down global markets, while China's retaliatory tariffs against U.S. and Canadian levies have severely impacted North American oilseed exports.
China has ceased soybean imports from the U.S. and rapeseed imports from Canada as a direct response to new tariff packages. Ukraine has also implemented a 10% export duty on soybeans and rapeseed, leading exporters to reduce farmgate prices and causing confusion among European traders.
The International Grains Council (IGC) reported in its September publication that average global export prices, as measured by the IGC GOI sub-index, saw a slight increase, supported by gains in U.S. and Brazilian quotations. Chicago soybean futures rose 3% from late August to mid-September, influenced by concerns over suboptimal Midwest weather impacting yield expectations and a decline in crop condition ratings, which added bullish sentiment despite weak international demand.
Soy oil prices provided crucial support, counteracting sluggish purchases from Chinese processors. U.S. Gulf FOB prices increased by 1% to $409 per ton, while in Brazil, soy export values rose 1% year over year to $448 per ton, driven by robust Chinese demand and domestic use in biofuels. Brazilian crushers are increasingly diverting soy oil to renewable fuel production, offering domestic market support.
In contrast, the rapeseed market has seen a downturn, with ICE canola futures in Canada falling 3% month-on-month due to advancing harvests and improved yield outlooks. Persistent concerns about weak Chinese demand and reduced rapeseed oil purchases contributed to this softness, leading to a decline in Vancouver FOB values for rapeseed by $23 to $479 per ton.
Data from the UN Food and Agriculture Organization (FAO) indicates that global vegetable oil prices rose 1.4% in August, reaching their highest level since July 2022. Increases in palm, sunflower, and rapeseed oils offset a slight decline in soy oil. Palm oil prices surged for the third consecutive month, fueled by global import demand and Indonesia's planned expansion of its biodiesel mandate in 2026. Tightened supplies in the Black Sea and European markets have lifted sunflower and rapeseed oil prices, even as soy oil experienced a slight decrease due to strong global supply expectations for the 2025-26 period.
The U.S. Department of Agriculture's Economic Research Service (ERS) noted in its May 2025 Oil Crops Outlook that U.S. soybean export sales have been sluggish, facing competition from aggressive shipments from Brazil and Argentina during the critical U.S. export window from October to December. China's rapeseed crush is also projected to be lower due to reduced Canadian imports, with China expected to increase rapeseed meal imports from Russia and India, further altering global oilseed trade routes.
For U.S. producers, co-ops, and exporters, the coming months are expected to remain challenging due to weak export demand, oversupply concerns, and foreign policy uncertainties. Key watchpoints include logistics, biofuel policies, and currency fluctuations. The oilseed sector's dynamics are being shaped by weather, yields, trade policy, and energy demand.