FAO-price index below previous month’s mark

Both the vegetable-oil and cereal-price indices for the Food and Agriculture Organization of the United Nations eased month-on-month. Nevertheless, record highs were reached year-on-year.

The December FAO vegetable oil price index averaged 144.4 points, which was down 6.7 percent on the previous month’ s level. In other words, the index reached the lowest level since February 2021, particularly due to falling prices for palm, soybean, rapeseed and sunflower oil.

World market prices for palm oil dropped just about 5 percent after having recovered for just a short time the previous month. The key reason was restrained global demand, because output by the most important palm oil-producing countries declined due to excessive rain.

World market prices for soybean oil also showed a decrease, above all because of bright prospects for a seasonal rise in production in South America.

Prices for rapeseed and sunflower oil fell based on abundant supply and dampened demand, especially in the EU. Pressure also came from declining crude-oil prices.

Looking at the entire year 2022, the FAO vegetable oil price index was 187.8 points. This translates to a 13.9 percent increase on 2021 and sets a new annual record.

International grain prices waned in December. The FAO cereal-price index averaged 147.3 points. This was down 4.8 percent on the previous month, but still up 4.8 percent on the same month the previous year.

According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), the index for the year 2022 reached a new high at 154.7 points. This was up 17.9 percent on 2021 and outstripped the previous record high of 8.8 percent recorded in 2011.

On the occasion of the current FAO publication, the Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP) has pointed out that, in terms of figures, food supply per capita of the world’s population is covered despite the war in Ukraine, given good harvests of oilseeds, at 0.644 billion metric tons, and grains (including rice), at 2.76 billion tons.

Nevertheless, the FAO lists 44 countries that rely on foreign food aid. Of these, 33 are in Africa.

The UFOP has contended the negative debate on biofuels from cultivated biomass as it does not take account of these contexts. The association has made clear that the question of food security does not arise for Germany and the EU.

The UFOP expects the German Minister of Agriculture, Cem Özdemir, to conduct a proper discussion that also takes into account the fact that approximately 60 percent of the rapeseed area is dedicated to the production of protein feed and such protein feed does not need to be imported from non-EU countries.

The UFOP has expressed its strong support of the BMEL’s protein-plant strategy but stressed that such strategy would have to incorporate all protein crops, even if part of the output is used to produce biofuels.

This is the ideal combination of adding value and making an appreciable contribution towards climate-change mitigation, the association has added.

It should be kept in mind that the cultivation of rapeseed, grain and other arable crops is subject to natural or ever-tightening legal restrictions.

The UFOP has urged Özdemir to take a holistic view of these aspects, as this would be the only way an arable farming or national biomass strategy would make sense in regard to supply and climate-change mitigation.

Referring to the statutory 4.4 percent cap on biofuels from cultivated biomass, the association has again pointed out the restrictions on the potential use of agricultural feedstock to produce biofuels.

UFOP argues that in view of climate-mitigation targets, it is all the more important to utilize the potential of the current area of land under cultivation to create sustainable value.

The implementation of the Renewable Energy Directive (RED II), which created the basis for global sustainability requirements for biomass cultivation also in third countries, should also be looked at in this light.

“Anyone calling for the abolition of biofuels from cultivated biomass should also be honest to admit that this would mean to forego the benefits of shaping an internationally binding regulatory framework for the sustained cultivation of biomass,” UFOP stated.