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Last Update: September 2015

Commentary on the recent development of price indices

In August 2015, all the FAO price indices trailing the oilseed complex moved down . Compared to July 2015, the oilseeds and vegetable oils indices shed 13 points each, retreating, respectively by 8 and 9 percent, while the price index for oilmeals fell by 8 points, or 4 percent. All three indices continue to fare at multi-year lows, reaching their lowest values since April 2009 in the case of oilseeds and oils, and since February 2012 in the case of meals.

The leading force behind the slide in the oilseed and oilmeal indices has been the drop in international soybean prices, which reflects the prospect of ample global soy supplies in 2015/16. Reports of timely rains in the United States’ main soy growing areas led analysts to confirm their forecasts of near-record global soybean production in 2015/16. The apparent economic slowdown in China, the world’s top soybean buyer, also weighed on soy prices. Despite deteriorating production prospects, both sunflower and rapeseed prices also eased, succumbing to the downward trend in soy.. In fact, rapeseed production is expected to decrease year-on-year in both Canada and the European Union, while sunflower production in the Black Sea region is forecast lower than previously.

With respect to vegetable oils, the fall in FAO’s price index primarily reflects the strong contraction in palm oil prices. In August, international palm oil quotations hit a six-and-a-half year low, pressured by slowing import demand (notably in India and China) and expectations of rising production in Southeast Asia during the coming months. Slowing demand from the biodiesel industry (linked to the recent plunge in mineral oil prices) and concerns that the weakening of economic growth could affect purchases by China also weighed on world prices for palm and other edible oils. 


Components of the oilseeds price index: Soybeans, US, cif Rotterdam; Copra Phil./Indo., cif NW Eur. port; Rapeseed, Europe, 00, cif Hamburg; Linseed, Canada, No.1, cif NW Eur. port; Sunseed, EU, cif Rotterdam (please note that sunseed has been added to the index only in January 1976).

Components of the oils/fats price index: Soybean oil, Dutch , fob ex-mill; Sun oil, EU, fob NW Eur. port; Rape oil, Dutch, fob ex-mill; Groundnut oil, any origin, cif Rotterdam; Cotton oil, US, PBSY, fob Gulf; Coconut oil, Phil./Indo., cif Rotterdam; Palmkernel oil, Mal./Indo., cif Rotterdam; Palm oil crude, cif NW Eur. port; Linseed oil, any origin, ex-tank, Rotterdam; Castor oil, ex-tank Rotterdam.

Components of the meals/cakes price index: Soy meal, 44/45%, fob ex-mill Hamburg; Sun pell., 37/38%, Arg., cif Rotterdam; Rape meal, 34%, fob ex-mill Hamburg; Copra exp. pell., Phil., domestic; Palmkernel  exp., 21/23%, cif Rotterdam.