Market Update 10th August 2022

Several factors have affected edible oils in the last week, with most adding to the upwards pressure on price.

US congress has passed the Inflation Reduction Act, which included within it several provisions for improving Biofuel use, which could have a longer-term effect on demand.

China also seems to be recovering with signs of increasing Soybean oil demand.

With the current hot, dry conditions in the US and Europe, many well also limit crops.

It’s also interesting that Indonesia has now chosen to reduce the export tax threshold for Palm oil. Is this because it expects exports to increase in Indonesia this month? Will it slow any exports or just drive tax revenue?

Coconut oil remains weak at around the $1,400 level. It has been a lean crop season, and with the potential disruption of the upcoming typhoon period, given the quiet previous year of typhoons, there is likely pressure just around the corner.

Prices for desiccated seem stable for now. Shippers in Indonesia and the Philippines have been cutting back on production as demand has been quieter. But with such an extended period of low orders, it seems likely that there will be pent-up demand.

European buyers are away for the summer holidays at the moment, but there are still some signs of demand for what remains of Q3 and Q4 out there.

With Sri Lanka still an unknown quantity regards its stability to export, buyers who usually buy just a month ahead from Sri Lanka are picking up the availability here and there just in case.

Workforce unrest and strikes in key logistics hubs in Europe over the coming weeks could mean September will be a busy month.