lecithin news q1 - 2024

In this edition, we’ll dive into the current state of the non-GMO lecithin market, highlighting recent price trends, potential future movements, and concerns surrounding Indian soybean crops.

MARKET OVERVIEW

The market for non-GMO lecithin has returned to normal conditions, with ample supply promoting healthy competition among suppliers. Consequently, prices have dropped during Q4 2023, reaching acceptable levels for closing deals for the year.

It’s worth noting that some industry participants have only fulfilled some of their needs, anticipating further price decreases during H1 2024. This is in response to the significant stocks accumulated by both sellers and buyers during Q4 2023.

These stocks have decreased over the past months, and it is now commonly accepted that inventories will have reached standard levels by the end of Q1 2024. We will see how the updated market prices unfold in the coming months as the market evolves.

NON-GMO SOYA LECITHIN - IDENTITY PRESERVED

The soybean harvest in India for 2023 is estimated at 10 – 11 million metric tons, translating to 54,000 metric tons of non- GMO IP soy lecithin compared to the 60,000 metric tons from the 2022 crop.

Due to the enhanced competitiveness of Indian soybean meal in the global market in Q4 2023, soybean crushing in India was high, resulting in additional lecithin production. This surplus volume exerted pressure on the market, decreasing lecithin prices to clear the tanks.

However, most of the export program for Indian soybean meal will be completed by the end of March, as Argentina exports are set to begin shortly. Consequently, we do not anticipate significant price movements for Indian lecithin in Q2 and Q3 of 2024.

Concerns for the Future of Non-GMO Soybean Crops in India

A potential threat to future non-GMO soybean crops in India looms as the government grapples with inflationary challenges. In spite of the arguments that growing genetically modified (GM) crops such as mustard could lower the prices of edible oil and benefit the country by reducing its dependence on foreign sources, the Supreme Court has rejected this viewpoint. This decision holds significant implications for the future of Indian crops.

For reference:

  • India’s total demand for edible oil was 24.6 million metric tons (2020-21), with domestic availability at 11.1 million metric tons (2020-21). In 2020-21, 13.45 million metric tons (54%) of the total demand was met through imports, including palm oil (57%), soybean oil (22%), sunflower oil (15%), and a small quantity of canola-quality mustard oil.

  • In 2022-23, imports accounted for 155.33 lakh metric tons (55.76%) of the total demand for edible oil.

SUNFLOWER AND RAPESEED LECITHIN

Captura de pantalla 2024 05 08 a las 12.32.20
Table 1: Sunflower harvest estimation
Captura de pantalla 2024 05 08 a las 12.32.49
Table 2: Rapeseed harvest estimation

The combination of seasonally high EU rapeseed crushings in Q4, unexpectedly higher Ukrainian sunflower crushings during the same period, and weakness in global vegetable oil prices intensified pressure on rapeseed and sunflower lecithin.

Price adjustments were more precise than anticipated, resulting in a slight premium of approximately EUR 0.30/kg compared to Indian non-GMO soy lecithin.

The substantial stocks accumulated throughout 2023 are expected to be depleted within the next few months, likely leading to price reductions for Q2-Q3 contracts.

CONCLUSION

The market for non-GMO lecithin has undeniably returned to normal conditions, with the potential for further price adjustments in sunflower lecithin. The extent of these adjustments will become clearer in the near future.

However, recent discussions in India regarding the potential allowance of GM varieties must be carefully weighed, as they could lead to significant changes in the market landscape in the coming years.

At Lasenor, we remain committed to monitoring market dynamics, providing timely insights, and offering comprehensive support to facilitate informed decision-making. We invite you to partner with us and unlock the true potential of your products in this ever-evolving market.