Slump in vegetable oil prices, amidst Argentine uncertainties

February 12, 2017 |

In Germany, UFOP reports that prices for vegetable oils fell from their high levels. Ample supply, decreasing demand and the firm euro rate sent asking prices on a slide. The German trade group said that scarce supply caused palm oil prices to rise by 18 per cent since October 2016. Over the past several months, soybean oil still benefited from uncertainty about the output volume of Argentinian soy. As weather conditions improved and with Brazil set to see a bumper crop, the high prices could not be maintained.

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The group adds that “US President Trump’s environmental policy makes the future use of soybean oil for biodiesel fuel production uncertain. Rapeseed oil, which had also picked up on firming asking prices for feedstock, also lost some ground. Agrarmarkt Informationsgesellschaft (AMI) reported that demand for vegetable oils waned appreciably over the past few weeks. Although the firm euro made imports to the euro area cheaper, buying interest was limited. Consequently, fundamental market factors have had a greater impact on vegetable oil prices than crude oil prices have. The WTI price has risen by more than 70 per cent since February 2016.”

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