Peanut Oil prices in the Brazilian market recorded a slight increase during the first half of May 2025, continuing the upward movement observed in April. The price firming was largely underpinned by supply-side constraints, steady international demand, and rising production costs. Despite the completion of the South American harvest with generally favorable yields, market participants reported limited availability relative to growing consumption needs, which reinforced bullish sentiment during the period.

• Peanut Oil prices in Brazil increased in the first half of May 2025, following April’s upward trend due to lack of supply and strong demand abroad.
• Higher input and logistics costs plus 5.49% inflation increased production costs and supported Peanut Oil prices.
• Export demand for Brazilian Peanut Oil was strong, especially from China and Middle East emerging markets, due to Sudan’s supply disruptions and trade shifts.
• The appreciation of the Brazilian real against the US dollar affected Peanut Oil export prices and suppliers had to adjust carefully to stay competitive.
• Peanut Oil prices will go down in the second half of May as new crop peanuts reduce production costs and manufacturers respond to balanced supply and lower downstream demand.

In April, Brazil had inflationary pressures, with the annual inflation rate reaching 5.49%, the highest since February 2023. This inflation pushed up input and logistics costs across the chain, adding to the cost of production of Peanut Oil. At the same time, the manufacturing activities in Brazil fell, with industrial activity slowing down and domestic supply constrained. All this created a firm market going into May.

On the international side, Brazil kept benefiting from high export demand of Peanut Oil, especially from China. Political instability and supply disruptions in Sudan, a major supplier of Peanut Oil to China, made buyers shift to more stable markets. Brazil’s quality and logistics infrastructure made it the preferred option. Export demand was also boosted by the trade tensions between China and the US, which diverted more interest to Brazilian Peanut Oil. And interest from Middle East buyers also added to the outbound shipments, depleting domestic inventory.

April was strong for Peanut Oil, with the external market driving most of the growth. But the Brazilian real appreciated against the US dollar and that was a challenge for exporters to keep prices competitive in the global market. This appreciation plus the firm export activity put more pressure on the local availability and kept prices strong in early May.

According to the market, prices will go down in the second half of May 2025. The new crop arrival will ease the raw material cost and will reduce the overall cost of production. Manufacturers and retailers will adjust their production and inventory accordingly and will have a more balanced supply and demand. Also, a small decrease in the downstream demand is expected, with transactions on need basis only. These market dynamics will ease the pressure and can lead to a correction in the Brazilian Peanut Oil market in the next few weeks.