FAO vegetable oil price index at 13-year high
The FAO vegetable oil index has been rising steadily for 12 months, reaching the second highest level this month since records began in 1990. Similarly, the cereal price index has increased to an eight-year high.
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. The index reached an average value of 174.7 points last month. This translates to an increase of nearly 8 percent month-on-month and around 224 percent compared to the same month a year earlier.
Prices of palm oil also continued their upward trend in May, reaching their highest level since February 2011. The slow growth in production in Southeast Asia failed to keep pace with rising global demand, with the result that palm oil stocks in leading exporting nations remained at a relatively low level. Soybean oil received support from prospects for strong global demand, especially from the U.S. biobased diesel sector, whereas prices for rapeseed oil were assisted by the continued tightness of global supply.
The FAO cereal price index reached 133.1 points in May, which was 6 percent above the previous month’s mark. Prices for corn saw the strongest rise (virtually 90 percent year-on-year), climbing to their highest level since January 2013. Global export prices for wheat showed signs of weakness in the second half of May. However, the monthly average remained 7 percent above the previous month’s mark and, consequently, was 29 percent up on the previous year.
The FAO cereal price index is based on official daily stock exchange and trade prices for wheat, barley, corn, sorghum and rice, weighted according to their average shares in world trade.