WASHINGOTN, D.C., U.S. — As global demand for vegetable oil grows, an increasing proportion of food use is being satisfied by palm and soy oil, the U.S. Department of Agriculture (USDA reported on Sept. 15. These two oils now account for nearly two-thirds of food oil consumption.

Oil palm plantations have expanded over the past several years, especially in Indonesia and Malaysia. As a result, an ever-increasing quantity of palm oil is being supplied to the global market. Likewise, record 2014-15 soybean production in both the U.S. and South America ensures ample supplies and growing availability of soy oil. Meanwhile, significant declines in rapeseed, sunflower seed, and cottonseed production are limiting supplies of these oils and encouraging a switch to palm and soy.

Price relationships among the various oils are also impacting purchasing decisions. Premiums for rapeseed, sunflower seed, and cottonseed oils have increased in recent months reflecting tighter supplies. Consequently, price-sensitive buyers are switching to soy oil as cheaper alternative soft oil. Palm oil remains the lowest priced oil, though its discount to soy has narrowed in recent months.

The 2015-16 global soybean production is reduced this month to 319.61 million tonnes as lower production in Canada and Ukraine is only partially offset by a higher U.S. production forecast. Trade is lowered this month due to a reduction in Ukraine’s exportable supplies. However, global exports remain at a record level of 126.48 million tonnes. Global stocks are reduced, reflecting a lower production and carry-over from last year forecast. The U.S. season average farm price is unchanged, the USDA reported.

The 2014-15 global soybean production is unchanged this month at 319.37 million tonnes. Exports are raised on larger shipments from Brazil and Ukraine to 124.88 million tonnes. Ending stocks are reduced in response to growing consumption and trade.

U.S. export bids, FOB Gulf, in August averaged $375 a tonne, down $29 from last month, reflecting a higher than-expected production estimate for the new crop. As of the week ending Sept. 3, U.S. 2014-15 soybean commitments (outstanding sales plus accumulated exports) to China totaled 29.6 million tonnes compared to 27.9 million tonnes a year ago. Total commitments to the world are 50.6 million tonnes, compared to 45.9 million tonnes for the same period last year. As of the week ending Sept. 3, U.S. 2015-16 soybean commitments (outstanding sales plus accumulated exports) to China totaled 6.1 million tonnes, compared to 13.3 million tonnes a year ago. Total commitments to the world are 16.1 million tonnes, compared to 24 million tonnes for the same period last year.