International vegetable oil prices dropped for the fifth consecutive month in April to reach levels prior to Russia’s invasion of Ukraine and the subsequent war, according to a report by Germany’s Union for the Promotion of Oil and Protein Plants (UFOP).
The benchmark United Nations’ Food and Agriculture Organization (FAO) vegetable oil index dropped 1.8 points – or 1.3% – to 130 points in April compared to the previous month, with only prices for palm oil unchanged from the previous month. Sunflower oil, soyabean oil and rapeseed oil all traded lower.
“After a brief upswing in March 2023, palm oil prices remained virtually unchanged in April, as the downward pressure from weak demand was almost offset by limited supply,” UFOP said in the 11 May report.
According to research by Agrarmarkt Informations-Gesellschaft, soyabean oil prices continued to decline, mainly due to forecasts of a bumper soyabean crop in Brazil, while drought and extreme heat limited the Argentine yield potential.
“Prices of rapeseed oil and sunflower oil continued their downward slide… as a consequence of the continued worldwide abundance of supply of exportable oils and seeds combined with restrained demand,” UFOP said.
Given the current index level for vegetable oils, UFOP said producer prices were reaching a level that was economically critical for agriculturists in the European Union (EU).
“As a consequence of the stabilisation of energy prices, producer prices for field crops need to increase generally to provide a basis for sustained production and diversified crop rotation,” UFOP added.
Resilient crop rotation was primarily the result of economics, according to the association.
The FAO’s vegetable oil price index illustrates the changes in international prices of the 10 most important vegetable oils in world trade, weighted according to their export shares.