Market Report - April 2014

Posted 02 April 2014

"Egg prices rise by as much as 24% in the EU"

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Oats (CBOT US) +11% Butter UK -8%
Coconut Oil (PH) +7% Mild Cheddar -2%
Liquid egg whole +12%

All percentage changes in this report refer to price movements over the previous month.

Date reference is MINTEC.
A long period of hot and dry weather in Brazil's south-central regions led to price rises in the oils, grains and soft commodity markets. Beef prices in the UK fell as result of retailers switching to cheaper imported beef.

EXCHANGE RATES

Against the $, Sterling opened the month at 1.633 and closed at 1.67.
Against the €, Sterling opened the month at 1.22 and closed at 1.21.

SOFT COMMODITIES

A long period of hot and dry weather in Brazil's south-central regions saw the price of several commodities surge last month. Sugar was up on ICE (+18%) and on LIFFE (+16%) following concerns that the dry weather might reduce crop yields.

Cocoa bean prices were unchanged on both LIFFE (0%) and ICE (0%), remaining at their highest levels since September 2011. In the UK, cocoa butter (+5%) and powder (+1%) prices increased reflecting firm demand for chocolate products.

OILS AND FATS

Prices for most vegetable oils rose, driven by supply concerns in South America and South East Asia. Soyabean oil prices rose in Rotterdam (+3%) as persistent hot and dry conditions in Brazil prompted supply concerns. Soyabean oil production forecasts for Argentina were reduced to 7.0m tonnes in 2013/14, down 5% from the previous month's estimate.

Sunflower oil prices also rose, with prices up in Rotterdam (+6%). Rapeseed oil prices rose in Rotterdam (+5%). Palm oil prices rose in Indonesia (+10%), Rotterdam (+9%) and Malaysia (+5%), as demand for palm oil for its use as a feedstock in biodiesel increases.

Price trends for lauric oils followed the same trend as other vegetable oils. Palm kernel oil rose in Rotterdam (+19%) and coconut oil prices rose (+9%).

GRAINS

The global wheat production forecast for 2013/14 was lowered by 0.7m tonnes in February to 711.8m tonnes, however this is still an increase of 8% y-o-y. As a result, wheat prices in some markets firmed or fell less steeply than in previous months.

Increases were seen for milling wheat in Canada (+3%) and on LIFFE Paris (+1%). Oats prices rose on CBOT US (+11%).

MILK AND DAIRY

Volumes of milk collected in the EU are increasing seasonally and are higher than the previous year, leading the price of some dairy commodities to fall, however high demand is keeping some prices at a high level.

Butter prices increased in New Zealand (+6%) but were down the UK (-8%). SMP and WMP prices in the EU saw rises in the UK (+1%).

Mild cheddar prices in the UK fell (-2%). EU egg prices tended to increase, with rises in Germany (+7%), the Netherlands (+5%) and France (+3%).

Processed egg prices were up in the EU, with industrial eggs (+24%), liquid yolk (+17%), whole liquid egg (+12%) and liquid white (+1%) all up.

ENERGY

Prices for Brent crude oil on ICE London rose (+2%) driven by improving global economic sentiment. Prices rose in Europe diesel (+1%), influenced by crude oil.


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