FAO vegetable oil price index hits multi-year high

The United Nations’ Food and Agriculture Organization (FAO)’s vegetable oil price index reached its highest level since April 2014 in November last year, driven by firming prices for all vegetable oils, especially palm.

The index illustrates the changes in international prices of the 10 most important vegetable oils in world trade and averaged 121.9 points in November 2020.

“This translates to a significant rise of 15.4 points, or 14.5% month-on-month, and marks the highest level since March 2014,” Germany’s Union for the Promotion of Oil and Protein Plants (UFOP) said on 9 December.

The index level came from higher palm oil prices but prices for soyabean rapeseed and sunflower oils also edged higher in November, UFOP said.

According to Agrarmarkt Informations-Gesellschaft (mbH), international prices of palm oil climbed for the sixth month running in November due to a sharp decline in global stocks as a result of lower output in key palm oil-producing countries, combined with buoyant global demand.

Prices for soyabean oil also rose due to reduced availability for exports in South America and strong buying interest, especially from India.

In addition, prices for rapeseed and sunflower oils climbed based on limited supply, while all vegetable oil prices benefited from rising international mineral oil prices, which they tracked due to biodiesel blending.