Vegetable-oil prices slump to pre-Ukraine-war level

The vegetable-oil index declined for the fifth-time running in April, reaching a level of 130 points.

This was down 1.8 points, or 1.3 percent, on the previous month.

Only prices for palm oil remained unchanged from the previous month, whereas sunflower oil, soybean oil and rapeseed oil traded lower.

After a brief upswing in March, palm-oil prices virtually remained unchanged in April, as the downward pressure from weak demand was almost offset by limited supply.

In contrast, according to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), asking prices for soybean oil continued to move downwards.

The main factor driving the slide was the expected bumper crop of soybeans in Brazil, whereas drought and extreme heat limited the Argentine yield potential enormously, thus dampening the decline.

At the same time, prices of rapeseed oil and sunflower oil continued their downward slide, especially as a consequence of the continued worldwide abundance of supply of exportable oils and seeds combined with restrained demand.

The FAO cereal price index averaged 136.1 points in April.

This was down 2.4 points (1.7 percent) on the previous month and down as much as 33.5 points (just less than 20 percent) from a year earlier.

The decline in world-market prices for important cereals outweighed the increase in prices for rice.

The Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP) has noted that the price indices for vegetable oil and cereal have reached the level they had before Russia’s war against Ukraine began.

The same applies to the April level of price increases for energy, fuels and fertilizers.

UFOP sees producer prices hitting a level that is economically critical for agriculturists in the European Union, given the current index level.

As a consequence of the stabilization of energy prices, producer prices for field crops need to increase generally to provide a basis for sustained production and diversified crop rotation.

The association has emphasized that resilient crop rotation is primarily the result of economics.