Market News 19th April 2024
April 19, 2024
The weather has been in the news this week, with massive storms in the Gulf…
It has been a busy few weeks for Vegetable oils. So, it remains true that vegetable oils, more and more, now track crude oil pricing. Even more mandates for blending biofuels mean that vegetable oils react to wider economic news just like crude oil.
Central banks continuing quantitative tightening is pushing both crude oil and edible oils. Also, recent banking instability has further pushed Palm oil to a seven-month low, even with stocks declining in some countries.
Even Soy has been weaker, with poor weather set to affect crops in some countries. Grain surplus tales from Ukraine are likely to add to market woes. Prices have picked up this week but only slightly.
Coconut oil only tracked slightly weaker in the same period, dragged ever so slightly by the wider market. Coconut oil is a far less suitable biofuel, mainly due to the smaller size of the market, but also its direct uses for a number of products such as cosmetics. But we could see a weaker soy market help coconut oil.
Desiccated coconut manufacture is heavily reliant and manpower and energy; the costs for both are increasing in the Philippines, just like everywhere else. But this week, we are hearing that the raw nut supply has started to become restricted in the Philippines as the prices paid for raw nuts are dropping, as millers lower prices to offset their higher operating costs.
It’s likely farmers could soon switch to more profitable work until the price of raw nuts climbs.
Millers will need to push their buying price to see if that encourages better supply. But they are still faced with climbing production costs, a catch-22 situation.
Next week and the following week will see extended holidays in the Philippines, which will also tighten supply as production stops.
Seems like prices will be higher in the near term and are likely to stay higher now. Shippers are also reporting heavy sales with nearby positions sold out, which will only add to the pressure on pricing. Seems we are likely in for a period now of rising prices and tightening supply, so watch out.
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