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Last Update: February 2015

Commentary on the recent development of price indices

In January, FAO’s three price indices for the oilcrop complex have fallen by 3–5 percent compared to the previous month. The indices for oilseeds, meals and vegetable oils decreased by, respectively, 9, 8, and 5 points (or 5, 4 and 3 percent). All three indices continue to fare at multi-year lows, although the meals index remains at a historically high level.  

International prices for oilseeds and oilmeals continued easing mainly on the prospect of large soybean availabilities in the 2014/15 season, owing to a record harvest in the United States and  forecasts of new bumper crops in South America.
In both Brazil and Argentina, prospects of record harvests have been confirmed, even if unfavourable weather conditions resulted in late plantings in parts of Argentina and sub-optimal crop development in some regions in Brazil. Recent upward revisions for the United States’ 2014 crop, together with a higher-than-expected forecast for U.S. end-of-season stocks also exerted downward pressure on prices. On the demand side, cancellations of large soybean orders by China contributed to the price weakness. International quotations for rape and sunflowerseed followed the slide in soybean prices, although global supply prospects for these crops turned slightly less favourable than earlier anticipated.

With respect to vegetable oils, FAO’s price index has fallen to the lowest level since October 2009, reflecting contracting prices for all major vegetable oils. Main drivers behind the general drop in prices include falling values for the respective oilseeds, subdued export demand, and reduced purchases by the biodiesel industry (as low crude oil prices continue to erode the competitiveness of vegetable oils as biodiesel feedstock). In the case of palm oil, the drop in prices was somewhat attenuated by Malaysia’s currency depreciation and by the adverse impact of heavy rainfall on Malaysia’s production.


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.