FAO price indices for oilseeds, vegetable oils and oilmeals

Last updated in November 2021

Commentary on the recent development of prices *

The month of October saw all three FAO price indices trailing the oilcrop complex continued rising. The oilseed and oilmeal indices rose moderately, increasing, respectively, by 2.3 and 2.4 points (or 1.7 and 2.2 percent) month-on-month, and remained above their year-earlier values. In the meantime, the vegetable oil index increased markedly, up 16.3 points (or 9.6 percent) from its level in September, to an all-time high.

The latest increase of the oilseed index broadly reflected firmer international rapeseed and sunflowerseed prices, which more than offset lower soybean prices. International soybean quotations fell for a fifth consecutive month in October, marking their lowest level since January 2021. On the supply side, seasonal harvest pressure weighed on prices as crop gathering progressed well in the United States of America, while in the Southern hemisphere, favourable weather conditions facilitated a rapid planting pace in Brazil, although prolonged dryness casted some doubt over Argentina’s crop prospects. From a demand perspective, additional downward pressure on prices largely stemmed from lower-than-expected crushings in China. Reportedly, besides lingering subdued demand from the pig sector, China’s domestic crush operations were also temporarily affected by electricity supplies. As for rapeseed, international prices continued rising in October and hit a record high, underpinned by prospects of tight global supplies, as substantial production losses in Canada could only be partially compensated by a bumper harvest in Australia. In the case of sunflowerseed, world quotations received support from inadequate spot supplies from the Black Sea region, notwithstanding expectations of a record global production.

With regard to oilmeals, the latest rise of the price index primarily reflected higher values for soy, rapeseed and sunflower meals. International soymeal prices increased only marginally in October, as upward pressure exerted by concerns over limited export availabilities due to slow crushings in South America was largely offset by downward pressure resulted from protracted low protein meal demand in China, while international quotations for rapeseed and sunflower meals rose markedly, buoyed by tight global supplies.

As for vegetable oils, the persistent strength of the index was driven by firmer values of palm, soy, sunflower and rapeseed oils. International palm oil prices increased for a fourth consecutive month in October, largely underpinned by persisting concerns over subdued output in Malaysia due to ongoing migrant labour shortages. In the meantime, world prices of palm, soy and sunflower oils received support from reviving global import demand, particularly from India that lowered import tariffs further on edible oils. In addition, delayed harvesting and reserved farmer selling of sunflowerseed in major producing countries also led to lower-than-anticipated crushings, lending further support to sunflower oil prices. As for rapeseed oil, the continued strength in international values chiefly stemmed from protracted global supply-demand tightness. Rising crude oil prices also lent support to vegetable oil values.

      
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