04.02.2008 Oils

General
Markets for vegetable oils are still under uncertainty. Severe draught in Argentina have still big influence on crop results concerning sunflower seed and soybean. Latest crop expectations vary from 3,8 – 4,0 Mio tons against 4,3 Mio few weeks ago.
As soybean stocks are at record low levels negative weather news have increasing impact on prices. Heavy rainfall in Brazil hinders early harvesting of soybeans. This will lead to lower supplies from Brazil in favour of US Soybeans.
Higher prices for grains and corn make it more difficult to gain acreage for soybean planting. Soybeans must be much more expensive in order to be competitive against grains and corn.
Today Indonesia announced to increase export taxes on palm products to 20-25 % if international market price for palmoil exceeds 1.200 US-$/t. Prices in Kuala Lumpur for palm futures rose by nearly 4%.
Weather uncertainties remain the biggest item to watch concerning oilseeds. Due to profit taking and the nervousness in the international financial market, futures get under pressure – but this situation remains very shortlived.
Many importing countries try to solve the inflation risk by reducing the import taxes. This leads to stable consumption. The usage of oils and oilseed remain high. As a consequence stocks get further down.
Palm Oil
Palm Oil Plan of the Indonesian government to increase export tax on palm products to 20-25 % if world market price for palm oil exceeds 1200 USD/t, hat increasing impact on palm oil prices. Today prices in Kuala Lumpur jumped by nearly 4%. Encouraged by higher soyoil prices interest on palm oil remain high. It is considered that due to the price difference between soyoil an palmoil a shift towards palm, mainly in Europe 27 will increase prices in short to medium term. With warmer temperatures coming usage of palmoil will increase in the northern hemisphere. Stocks of palmoil will be reduced as the production peak of palm trees is over. Supply concerns will occur and this will increase the prices.
Coconut- and Palmkernel Oil
Driven by higher Palm Oil prices of palmkernel oil increased more sharply than those of coconut oil. Palmkernel oil is now more expensive than coconut oil.
Higher Palmkernel oil prices lead to higher coconut oil prices.
Production in exporting countries is below demand growth. Unregular shipments and the fact that most of the users are not long covered keep the prices at a high level.

Rape Oil and Sun Oil
Rape Oil prices hat a setback due to uncertainty in the biodiesel industry. New taxes in Germany on Bio diesel had a negative influence on usage of rape oil.
Contrary to weaker oil prices rape seed prices increase due to crop prospects.
Rapeseed supplies will be tight this and next season due to lower production and stocks.

Sun Oil
Sunoil remains at record levels as relief from Argentina will not come as expected. Demand for sun oil remains very high. Latest crop expectations vary from 3,80 – 4,0 Mio tons against 4,3 Mio few weeks ago.