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Drought Draining Reserves of (edible) Oils Amid Record Demand
Demand for edible oils is climbing to a record as drought damages crops across South America, leaving buyers with the smallest stockpiles in three decades.
The use of soy, palm, rapeseed and six other oils will rise 3.9 percent this year, reducing the ratio of reserves to demand to the lowest since 1977, the U.S. Department of Agriculture estimates. Palm, the most-consumed oil, will advance 8.5 percent to 3,800 ringgit ($1,240) a metric ton in Kuala Lumpur by Dec. 31, the highest since February 2011, according to the median of 11 analyst and trader estimates compiled by Bloomberg.
While wheat dropped 23 percent and corn lost 19 percent in the past year as farmers reaped record crops, oilseed prices are surging after drought parched fields across South America, the biggest soybean-producing region. U.S. growers are planting the most corn acres since 1937 and reducing soybean plantings to the smallest in five years, the government estimates. Many farmers bought most of their seeds by January. Since then, soybeans have jumped 19 percent and palm oil 14 percent.
“The edible-oil market is tightening up more quickly than anyone expected,” said Wayne Gordon, an agriculture strategist at UBS AG who warned almost a year ago that drier weather would parch South America crops. “It’s in rationing mode. We have yet to see the peak in prices.”
http://www.bloomberg.com/news/2012-04-16/drought-draining-stocks-of-oils-amid-record-demand-commodities.html
The use of soy, palm, rapeseed and six other oils will rise 3.9 percent this year, reducing the ratio of reserves to demand to the lowest since 1977, the U.S. Department of Agriculture estimates. Palm, the most-consumed oil, will advance 8.5 percent to 3,800 ringgit ($1,240) a metric ton in Kuala Lumpur by Dec. 31, the highest since February 2011, according to the median of 11 analyst and trader estimates compiled by Bloomberg.
While wheat dropped 23 percent and corn lost 19 percent in the past year as farmers reaped record crops, oilseed prices are surging after drought parched fields across South America, the biggest soybean-producing region. U.S. growers are planting the most corn acres since 1937 and reducing soybean plantings to the smallest in five years, the government estimates. Many farmers bought most of their seeds by January. Since then, soybeans have jumped 19 percent and palm oil 14 percent.
“The edible-oil market is tightening up more quickly than anyone expected,” said Wayne Gordon, an agriculture strategist at UBS AG who warned almost a year ago that drier weather would parch South America crops. “It’s in rationing mode. We have yet to see the peak in prices.”
http://www.bloomberg.com/news/2012-04-16/drought-draining-stocks-of-oils-amid-record-demand-commodities.html
1 replies
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http://www.cmzoo.org/conservation/palmOilCrisis/
The increased demand for palm oil is fueling destruction of the rainforest habitat of Sumatran and Bornean orangutans, pushing those endangered species even closer to extinction. Estimates show that if something isn't done soon to stop the spread of palm oil plantations into the forests that harbor these orangutans, they will be extinct in ten to fifteen years.
The increased demand for palm oil is fueling destruction of the rainforest habitat of Sumatran and Bornean orangutans, pushing those endangered species even closer to extinction. Estimates show that if something isn't done soon to stop the spread of palm oil plantations into the forests that harbor these orangutans, they will be extinct in ten to fifteen years.
