Firm prices for palm, soybean and rapeseed oil drove the FAO vegetable oil price index higher in July. The cereal price index remained virtually unchanged at the previous month’s level.
The FAO’s vegetable oil price index, which illustrates the changes in international prices of the ten most important vegetable oils in world trade, rose to 93 points in July. This translates to an increase of 7 points or 8 per cent on the previous month and a five-month high. The surge of the index was spurred by firm prices for palm, soybean and rapeseed oil. Palm oil benefited from prospects of a slowdown in production in the wake of flooding in the most important palm oil-producing countries. Strong global demand for imports and continued concerns over labour shortages in Malaysia gave prices an additional lift. Rapeseed oil received support from growing demand from the biodiesel and food sectors in the EU.
On the other hand, the cereal price index remained at the previous month’s level of 97 points in July. Wheat prices barely moved, despite a weakening US dollar, concerns over harvest prospects in Europe, the Black Sea region and Argentina, and high crop expectations in Australia. Barley prices also remained stable. Maize and sorghum rose due to China’s recent purchases and concerns over growing conditions in the US. In contrast, prices for rice dwindled. The falloff was prompted by sluggish trading and prospects of a large 2020 crop.
Source: UFOP, 2020-08-17.