29.12.2007

General

Markets for edible oils are further burning. Record prices have been reached at . The following facts influence the direction of the markets:

1) Rising Mineral Oil Prices to record levels keep the interest for vegetable oil at a high level. One Barrel cost at the moment 92,80 US-$/Barrel. The development can be seen in the chart below.
2) Supplies with oilseeds will remain very tight in the season 2007/2008. According to the latest USDA report world´s production of oilseeds will decrease by nearly 4%. In the same time usage of oilseeds will increase by nearly 3%. This means that shortage of oilseeds will occur in the medium term.
3) According to the latest USDA report world´s production of oils will increase by 3,71%. In the same time usage of oils will also increase by 3,8%. This situation will lead to a reduction of stocks.
4) Demand from China and India remain at a very high level. Regular purchases keep the prices very firm.
5) Very high prices for sunoil the prices of other oils to new records. Export Tax uncertainties or export restrictions in exporting countries cause still nervousness both at sellers and buyers


Palm Oil

Increasing Export figures, stable production results, keep the prices for palm oil at a very high level.
Boosted by increasing soyoil prices at the CBOT palm oil prices reached record highs. After Indonesia has increased the export taxes on palm products prices increased heavily on Friday. Rumours that China will reduce import taxes on soy- and palm oil keep the nervousness on the markets.
Despite the very high levels record trades are made in Kuala Lumpur which is an indication that short covering is being done heavily and closed today with limit up for January 2008 contract.

It is a fact that most consumers are not covered for 2008 in total.

Coconut Oil and Palmkernel Oil

Driven by boosting soyoil, palmoil markets also the market for coconut- and palmkernel oil increase steadily.
Very low stocks and the very slow production increase keep the prices firm.
Short covering and the fact that consumers are not fully covered for 2008 lead to increasing prices.

Rapeseed Oil

Still very high prices for sun oil and its premium over rape oil keep the prices for rape oil at record highs. Also increasing mineral oil prices make rape oil competitive as fuel oil. The demand from the bio diesel industry is still existent. And rumours that many bio diesel producers are not covered keep the prices high.
Prices are also high due to still very high prices for rapeseed. Futures for rapeseed at the EuroNext have also reached record levels. The tightness in rapeseed supplies is also existent as the demand have more risen than the increase in production.

Sun Oil

Sun Oil Prices came under pressure at the beginning of last week. Having reached 1200 US-$/t level buying interest occurred. Boosted by increasing soyoil prices, prices for sunoil were also supported. Sellers became reserved by the end of the week.
Expectations that Argentina has produces much less sunoil during last crop and very low stock levels there keep the prices firm.
Unfavourable weather conditions increased the acreages less than anticipated. Depending on the crop results in the northern hemisphere prices will remain firm