By FWi staff
ALL oil markets were lower last week under the lead of a very weak palm oil market.
The combination of sharply lower oil prices, harvest pressure (USA, Canada) and bearish US Department of Agriculture soyabean stock data erased any hope of an immediate price recovery.
In the EU, unfavourable crush margins have resulted in crushing plants running below capacity and reportedly leading to the indefinite closure of two plants.
Price pressure on seed prices, which were generally believed to be overvalued, has increased.
The plant closure reports triggered more buying interest for rapemeal.
Prices have remained firm (currently trading at 100/t compared with 88/t earlier in the season), stopping margins from falling further.
The European rapeseed market again saw a lack of sellers and a lack of buying activity.
MATIF rapeseed futures fell by 1.75, while UK delivered values were 1-2/t lower.
Price losses were, in part, limited by a stronger US Dollar against the Euro and Pound.
Malaysian palm oil prices fell to a seven-year low last week, as stocks were revised higher and exports remained slow.
Increased competition from neighbouring Indonesia has increased pressure on Malaysian palm oil, pushing prices lower.
In the meantime, buying activity from main consumers like India, Pakistan and China is slow.
Seasonal higher domestic supplies, and cheaper palm oil prices by the day, have resulted in reserved buying.
Palm oil only accounts for 20% of total world oil production, but 40-50% of world oil trade.
This is why the recent price falls have had a significant impact on our domestic vegetable oils.
- 1 = 60.06p, 1 = 1.665 at time of writing.
Taken from HGCA weekly MI Oilseeds|
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