The World Food Organization (FAO) sugar price index has fallen to its lowest level since December 2020. The vegetable oil price index also showed a further decline last month, dropping to its lowest level in five months.
In November, the sugar price fell another 6%. The index thus dropped to 88,6 points, with the base of 100 points being determined based on the average price level in 2014, 2015, and 2016. Last summer, the sugar price stabilized at a level just above 100 points, but since September, the price has fallen sharply again.
Over the past year, the sugar price index has fallen by 30%. Globally, production is increasing, exceeding consumption. Brazil has a large sugar production, and favorable prospects in India and Thailand also support the higher production estimates.
The vegetable oil market fell to a price index of 165 points in November. Compared to October, prices are down 2,6%. Palm oil, rapeseed oil, and sunflower oil, in particular, lost ground; only soybean oil rose slightly.
International palm oil prices fell sharply. Production in Malaysia was higher than expected, meaning palm oil was once again being traded at a discount to competing oils. This put further downward pressure on the entire supply chain.
After months of rising, rapeseed oil prices fell, supported by improved global harvest prospects. Sunflower oil prices also fell due to increasing seasonal supplies from the Black Sea region, where export flows are currently running smoothly.
Soybean oil was the exception. Strong global demand from the biodiesel sector, particularly in Brazil, supported prices. Nevertheless, rising soybean oil prices could not offset declines in other oils. A decline in global crude oil prices also had a price-softening effect.