FAO price indices for oilseeds, vegetable oils and oilmeals

In October, the FAO price index* for oilseeds fell slightly, down 3.1 points (2.1 percent) from the previous month. While marking the lowest level since the beginning of 2022, the oilseed price index fared 4.3 percent above its year-earlier level. Meanwhile, the vegetable oil index continued to decline, shedding 1.3 points (0.8 percent) from September and falling by 18.2 percent year-on-year. By contrast, the oilmeal price index was virtually stable, slightly up (0.2 percent) month-on-month and standing 13.1 percent above its level in the corresponding month last year.

The new decline of the oilseed price index was chiefly driven by lower soybean values, which outweighed higher rapeseed and sunflowerseed prices. After rising for two consecutive months, international soybean prices declined slightly in October, mainly underpinned by: i) the seasonal harvest pressure stemming from the United States of America (United States); ii) a generally favourable production outlook in Brazil, where sowing activities are underway; and iii) concerns about future import demand from China amid sluggish economic growth. On the other hand, protracted dryness in major growing regions of Argentina, as well as disruptions to internal logistics in the United States, due to low water levels in the Mississippi river, provided limited support to soybean prices. By contrast, world rapeseed prices rose in October after declining uninterruptedly for five months due to uncertainties over Ukraine’s export prospects and rising global import demand following sharply lower import costs observed lately. In the case of sunflower seed, severe harvest delays in both the Russian Federation and Ukraine, due to recent excessive rains, resulted in marginally higher international prices.

With regard to oilmeals, the price index remained steady in October, primarily reflecting stable soymeal quotations. On the supply side, prospective ample soybean production in South American countries weighed on the global soymeal market, while insufficient protein meal supplies in China, following improving livestock producer margins, limited the downward pressure on world prices.

As for vegetable oils, the marginal decline of the index was mostly driven by lower world prices of soy and rapeseed oils, which more than offset stable palm oil and higher sunflowerseed oil quotations. In October, international palm oil prices were virtually unchanged from the previous month, as the impact of lingering heavy stock levels in Southeast Asia and looming global economic recession was offset by the upward pressure linked to concerns over unfavourable weather prospects in pockets of major growing areas. Meanwhile, world soy and rapeseed oil prices dropped on prospects of ample supplies in the coming months. By contrast, international sunflower oil prices rebounded moderately after falling continuously over the past half a year, reflecting the uncertainty that prevailed in October over the future of the export corridor in Ukraine amid rising geopolitical tensions.

* The monthly Monthly Price Update is an information product provided by the oilseeds desk of the Markets and Trade Division of FAO. It reviews the development of international prices for oilseeds, oils and meals as reflected by FAO’s price indices. Previous issues can be downloaded from the FAO website at the following webpage: https://www.fao.org/markets-and-trade/publications/en/?querystring=oilseeds

Please note that the views expressed in this information product are those of the author(s) and do not necessarily reflect the views or policies of FAO.

Explanatory notes:

FAO's price indices are calculated using the Laspeyres formula; the weights used are derived from 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; sunflower seed, fob Black Sea (please note that sunflower seed has been added to the index only in January 1976 and, until December 2012, referred to EU, cif Rotterdam).
  
• 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.