Soft commodities fell as traders weighed up improving prospects for global food supplies, with signs pointing to burgeoning palm oil exports from Indonesia and a big Russian wheat harvest this season.
Almöl continued to plunge into a bear market, falling about 9 percent on Monday and another 1.8 percent on Tuesday as leading shipper Indonesia ramps up shipments. That’s a turnaround since late April, when prices hit record highs, when the country temporarily banned palm oil exports to cool domestic food inflation and the war in Ukraine curtailed sunflower oil trade.
In Chicago, wheat and corn prices fell about 2 percent as trading resumed after a holiday. The outlook for North American wheat shipments is improving, while analysts continue to raise their estimates for the Russian wheat crop, which is expected to be near or at record levels after favorable spring weather.
The declines offer some relief to consumers around the world who are facing rapidly rising living costs and growing food insecurity. The United Nations food price index has slipped from a record high in March after the Russian invasion choked off exports from Ukraine, a leading shipper of grain and vegetable oil.
“There are signs that the global food crisis is nearing its peak,” said Chua Hak Bin, an economist at Maybank Investment Banking Group. He added that the slump in palm oil will ease the pressure on cooking oil prices.
Indonesia is speeding shipments of palm oil to “flush out” its overflowing inventories, a move that will challenge shipments from rival Malaysia. Data shows that Malaysia’s exports fell more than 10 cents month-on-month in the first 20 days of June. Volumes to India and Europe fell, but rose to China.
Cooking oil price hikes in China are likely to end with the restoration of palm oil supplies, according to Chen Bin, a Shandong-based analyst at Shanghai Ganglian E-Commerce Holdings Co. Given that palm is the world’s most commonly used cooking oil and a key commodities in in the food processing industry, the drop in prices will significantly ease global food inflation, she said.
https://www.independent.ie/business/world/global-food-inflation-gets-reprieve-as-wheat-and-palm-oil-tumble-41773005.html Global food inflation is given a reprieve as wheat and palm oil plummet