Vegetable oils and sugar continue to decline in price

The sugar price index of the Food and Agriculture Organization (FAO) has fallen to its lowest point since December 2020. The price index of vegetable oils also shows a decline over the past month, dropping to its lowest level in five months. In November, the sugar price fell another 6%. The index thus decreases to 88.6 points, with the base of 100 points determined based on the average price level in the years 2014, 2015, and 2016. Last summer, the sugar price stabilized at a level just above 100 points, but since September, the price has been significantly decreasing again. Over the past year, the sugar price index has declined by 30%. There is a greater production worldwide that exceeds consumption. Brazil has a large sugar production, and favorable prospects in India and Thailand support the higher production estimates. The market for vegetable oils dropped in November to a price index of 165 points. Compared to October, prices are 2.6% lower. In particular, palm oil, rapeseed oil, and sunflower oil lost ground, with only soybean oil rising slightly. International palm oil prices fell sharply. Production in Malaysia was higher than expected, leading to palm oil being traded at a discount compared to competing oils. This put further downward pressure on the entire chain. After months of increases, prices for rapeseed oil fell, supported by improved harvest prospects globally. Sunflower oil prices also dropped due to increasing seasonal supply from the Black Sea region, where export flows are currently running smoothly. Soybean oil was the exception. Strong global demand from the biodiesel sector, especially in Brazil, supported the prices. Nevertheless, rising soybean oil prices could not compensate for the declines in other oils. A decline in global crude oil prices also had a price-softening effect.