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Last Update: November 2014

Commentary on the recent development of price indices

In October 2014, the FAO price indices for oilseeds and meal/cakes were about unchanged, while the vegetable oils index rose slightly compared to September (by 2 points or 1 percent), thus interrupting the declining trend observed in the previous six months. In historical terms, all the three indices reached multi-year lows, although the weakening of meal prices was less marked than for oilseeds and oils.
International prices for oilseeds and oilmeals continued easing, mainly driven by the prospect of large soybean availabilities during the 2014/15 season. Soybean prices fell for the fifth consecutive month in October, to a level faring about 20% and 30% below the corresponding values in 2013 and 2012. Despite recent downward revisions to the 2015 crop forecasts in Brazil and Argentina (respectively caused by unfavourable weather and lower than anticipated plantings), global production and supplies of soybeans are still expected to climb to new records in 2014/15.  Interestingly though, soybean prices and, even more so, soymeal prices gained some strength towards the end of October, as harvest delays and logistical bottlenecks in the United States coincided with unfavourable planting conditions in both Brazil and Argentina. Meanwhile, international quotations of sunflower seed have strengthened month-on-month on reports of lower than anticipated crop yields in Ukraine and the Russian Federation. Rapeseed prices continued faring well below the averages of the past two seasons, reflecting forecasts of near-record supplies in 2014/15. 

Palm and sunflower oils were mainly behind the October upturn of the vegetable oil price index. International palm oil quotations strengthened – after six consecutive months of contraction –, reflecting both production slowdowns in Malaysia and Indonesia (linked to a long spell of dry weather earlier this year) and a recent revival in global import demand. Forecasts of weak production growth in the first half of 2015 (as a result of recent unfavourable weather conditions in parts of Indonesia and Malaysia) also weighed on prices. As to sunflower oil, prices reacted to disappointing crop prospects in the Black Sea region which, if confirmed, will result in lower than originally expected global sunflower oil supplies. International quotations for soyoil, by contrast, weakened further on confirmation of ample availabilities in 2014/15, thereby limiting the rise in the overall oil price index.


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.