Sunflower oil commodity prices have fallen by a quarter in the past year - and UK shoppers are finally beginning to see the benefit.
The cost of sunflower oil in the EU has fallen 25% year on year to £616.4/tonne, according to the latest data from Mintec, and is down 9.4% compared from the previous month.
The price fell partly on the back of increased global production of oil, which the USDA forecasts to be up 7% year on year in 2013/14. Forecasts for Ukraine and Russia, which account for almost 50% of global sunflower oil production, are expected to be up 10% and 5% year on year, it added.
Tea prices rise plastics on the boil
Tea prices in Sri Lanka have continued to rise due to firm demand and now stand at £2,893/tonne - up 23.7% on last month and 5.8% higher than this time last year.
Plastics prices also remain on the boil: HDPE in the UK is up 18% year on year as the market resets following exceptionally low prices in 2012, while LDPE is up nearly 20% on this time last year because of output cuts from producers following low demand in early 2013.
As we report above, sunflower oil prices are on a firm downward trajectory, falling by nearly 10% over the past month and down 25% year on year.
Also down dramatically are rye prices, thanks to good production forecasts for the 2013/14 season.
Another factor in the price drop had been palm oil and soybean prices, which drive the oilseed market, Mintec said. In July, the FAO oils/fat price index fell to its lowest level for three years, with the good US soybean forecast putting downward pressure on all seed oil markets, and coinciding with a fall in global demand. And the US Federal Reserve’s policy to reduce quantitative easing has also helped cut demand from commodity speculators.
Although there has been a slight increase in prices in recent weeks, which Crispin Donaldson, trading director at oil specialist The Kerfoot Group said was due to weather volatility, it was unlikely there would be a great deal of movement from now on. “Once the combines start rolling, the psychological factors keep a lid on prices,” he said. “We’re already seeing price reduction in the UK retail market.”
Walter Zanré, UK MD of Filippo Berio, agreed retail prices were likely to fall further once the crop was harvested in September. “We expect to see the retail price come down on the benefit of lower costs,” he said. “It’s likely retailers will pass them on as it is a tough market, and as soon as one brings the price down, there will be a domino effect.”
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