NAPERVILLE, Illinois, March 6 (Reuters) - Despite being the world's second-biggest producer of soybean oil after China, the United States all but ceased to export the vegetable oil nearly three years ago amid sky-high prices.

However, the picture is completely different in 2025, which began with near-record U.S. soybean oil shipments. This reflects an easing in prices as well as soyoil's competitive advantage versus rival vegetable oils, keeping U.S. exporters in the game.

Census Bureau data published on Thursday revealed U.S. soybean oil exports , opens new tab in January reached 212,714 metric tons, the most for any month since January 2010 and the fourth-largest volume on record for any month.

By comparison, U.S. soyoil exports in the 2022-23 marketing year ended September 30, 2023 totaled just 171,417 tons, an all-time low.

Export demand for U.S. soybean oil became scarce after global prices soared to all-time highs in early 2022. That was partly driven by aggressive U.S. renewable fuel goals that if implemented, would drastically increase domestic bean oil use.

But those plans did not exactly come to fruition. U.S. soybean oil export sales picked up again in 2024 as prices sank to multi-year lows, particularly toward the end of the year when soybean oil carved out a rare discount to palm oil.

Palm oil is the most abundant vegoil, though production issues and biofuel policies have tightened global supplies. Palm oil futures , opens new tab briefly dipped below those of soybean oil earlier this year, but bean oil is once again cheaper, making its case for global demand.

India, the world's leading edible oil importer, accounted for 20% of U.S. soybean oil exports in the first four months of 2024-25. South Korea, Colombia and Mexico combined for another 41% of shipments.

Mexico is frequently a top destination for U.S. soybean oil, which could present risks to exporters should full trade tariffs resume in April.

Canada is a mild importer of U.S. soybean oil, but most of its canola oil exports are U.S.-bound. Without a trade resolution between Ottawa and Washington, less Canadian canola oil crossing the U.S. border could increase domestic U.S. soyoil demand, leaving less room for exports.

STRONG SALES

As of February 27, U.S. soyoil export sales for 2024-25 totaled 764,000 tons, a 12-year high for the date. The U.S. Department of Agriculture pegs full-year exports at 726,000 tons.

Demand remains hot as at least 40,000 tons of U.S. soyoil sales were tallied this week between two separate flash sales, potentially pressuring the USDA to raise its outlook next week.

Total soyoil export sales so far represent an unusual 105% of USDA's outlook. The fullest coverage by this date in recent years was between 85% and 89% in 2020 and 2022. Final exports in both years were significantly larger than what USDA had projected in each February.

Although they will not match January's feat, U.S. soyoil exporters likely handled above-average volumes in February. As of last week, some 69% of all 2024-25 U.S. soyoil bookings had been shipped out, a relatively normal portion.

U.S. soyoil exporters' most successful marketing year of the last decade was 2019-20 at 1.29 million tons.

BIGGER PICTURE

The United States will likely be the third- or fourth-largest supplier of soybean oil in 2024-25, though top exporter Argentina's shipments are projected to be eight times larger than U.S. ones.

Argentina should continue dominating the space as record soybean processing volumes as well as export tax cuts are highly supportive of strong shipments.

On the demand side, India may need to step up vegoil purchases in the coming months as below-average imports have depleted its stocks.

Setting aside USDA's possible underestimation of 2024-25 U.S. soyoil exports, the agency last week tentatively estimated 2025-26 U.S. exports up about 5% on the year coupled with a 2% production increase.

Of course, a sudden, unexpected shift in U.S. biofuel policy could throw all these numbers out the window.

But barring that scenario, the United States could be on pace to beat export estimates and remain an important source for soybean oil, especially without an easing in palm oil prices.

Karen Braun is a market analyst for Reuters. Views expressed above are her own.

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https://www.reuters.com/markets/commodities/us-soyoil-exports-hit-15-year-high-pricy-palm-shifts-vegoil-trade-braun-2025-03-07/