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FAO price indices for oilseeds, vegetable oils and oilmeals

Last updated in August 2020

Commentary on the recent development of prices *

The month of July saw FAO’s price indices for oilseeds and vegetable oils rise to multi-month highs, gaining, respectively, 3.1 and 6.6 points (or 3.5 and 7.6 percent). By contrast, in the case of oilmeals, the price index only marginally recovered from the marked falls registered in May and June, up merely 0.5 points (or 0.6 percent) in July. Compared to their year-earlier levels, the oilseeds and oilmeals indices stood, respectively, 4 and 2 percent above the respective July 2019 values, while the vegetable oils index registered a remarkable advance of 19 percent year-on-year.

The additional gain in the oilseeds index mainly stemmed from higher soybean and rapeseed values, while international sunflowerseed prices remained virtually unchanged. After a first rise in June, international soybean quotations maintained their upward momentum in July and climbed to the highest level since January 2020. The latest gains mainly reflect developments in the United States of America, notably: i) lower than originally expected 2020/21 plantings, based on survey results released by USDA at the end of June; ii) persistently warm and dry weather conditions in several key growing regions; iii) reports of higher than anticipated domestic crushings during June; and iv) robust sales to China. Meanwhile, further tightening supplies in Brazil – following a record export campaign – kept Brazilian export prices at a premium over US values. However, international soybean prices dropped slightly towards the end of the month on both improved weather prospects in the United States of America and signs of further tensions between the country and China. As for rapeseed, international quotations appreciated for a fourth consecutive month. While EU production prospects deteriorated further due to prolonged dryness across major growing regions, also Ukraine’s rapeseed crop suffered from unfavourable weather conditions. With regard to sunflowerseed, quotations crept marginally higher in July on concerns that below-average rainfall combined with high temperatures could affect yield potentials in pockets of the Russian Federation – although the Black Sea region’s overall 2020/21 output is still forecast record-high, thanks to larger than expected plantings in Ukraine.

In the case of oilmeals, the timid month-on-month recovery in FAO’s price index mainly reflects more dynamic soymeal values – the single most important component of the index. While global feed demand remained subdued in the aftermath of COVID-19 induced lockdowns, in China, pig herds continued to recover at an accelerated pace from African swine fever, boosting domestic soymeal consumption. In addition, international soymeal prices were supported by the rise in soybean quotations.

The gain in FAO’s vegetable oil index primarily reflects firm palm, soy and rapeseed oil values. International palm oil quotations rose for a second consecutive month in July, largely underpinned by prospective production slowdowns in Southeast Asia due to localized floods.  
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* Effective 2 July 2020, the base period of FAO’s price indices has been shifted from 2002–2004 to 2014–2016.

  For more details on this revision, please see the feature article of the June 2020 issue of Food Outlook.

 
 

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Explanatory notes:

FAO's price indices are calculated using the Laspeyres formula; the weights used are the average export values of each commodity for the 2014–16 period. The indices are based on the following international spot prices for nearest forward shipment (provided by Oil World):

  • 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 vegetable oils 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.

NB: For the period 1961–1969, only annualized values are available and the indices have been calculated using export unit values extracted from FAOSTAT.