Monday, November 28, 2022

Fall in wheat and palm oil brings relief to global food inflation

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Agricultural commodities declined as traders weighed a better outlook for global food supplies, pointing to increased palm oil exports from Indonesia and a larger Russian wheat harvest this season.

Almond oil slipped further in a bear market, falling nearly 9pc on Monday and another 1.8pc on Tuesday, as top shipper Indonesia ramped up shipments. This is a change from late April when prices hit record highs as the country temporarily banned palm oil exports to quell domestic food inflation and the war in Ukraine dented the sunflower oil trade. stopped.

Wheat and corn prices in Chicago fell nearly 2 per cent as business resumed after the holiday. The outlook for North American wheat supplies is rising, while analysts continue to raise their projections for Russia’s wheat crop, which is expected to be on record or after favorable weather in the spring.

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The decline offers some respite for consumers around the world who face rapidly rising living costs and growing food insecurity. The UN food price index fell from a record high in March as Russia’s aggression halted exports from Ukraine, one of the top grain and vegetable oil shippers.

“There are signs that the global food crisis may be at its peak,” said Chua Hak Bin, an economist at Maybank Investment Banking Group. He said the fall in palm oil would ease pressure on cooking oil prices.

Indonesia is ramping up shipments of palm oil to “draw out” its overflowing reserves, a move that would challenge cargoes from rival Malaysia. The data shows Malaysia’s exports fell more than 10p,c in the first 20 days of June compared to the previous month. Volume sank for India and Europe but rose to China.

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According to Chen Bin, a Shandong-based analyst at Shanghai Ganglian E-commerce Holdings Co., the price hike for edible oils in China will likely end with the resumption of palm oil supplies, given that palm is the world’s largest producer of oil. The edible oil used is and is a key, he said, adding that the fall in the prices of raw materials in the food processing industry will significantly reduce global food inflation.

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