Market Report - October 2016

Market Report Up until October 2016

All percentage changes in this report refer to month-on-month price changes and are provided by Mintec.

FX Rates

Currency against Sterling Opened August Closed August
Dollar 1.32 1.31
EURO 1.18 1.175

Softs

Sugar prices rose on ICE US (+5%), but remained stable on London ICE (0%). The sugar cane harvest in Brazil has gathered pace, due to favourable dry weather conditions.

High sugar prices this year has also given mills an incentive to send more canes to sugar production rather than ethanol production. However, concerns that global ending stocks will fall to six year lows in 2016/17, continue to add upward pressure to prices.

Cocoa bean prices rose on both ICE US (+4%) and London ICE (+4%), due to concerns that unfavourable weather conditions in the Ivory Coast could offset the recovery in production expected in 2016/17.

Oils and fats

Vegetable oil prices were generally supported by increasing palm oil prices and increased demand.

Soyabean oil prices rose in Rotterdam (+5%) supported by the low level of South American exports. Rapeseed oil prices rose in Rotterdam (+5%) supported by lower production. Palm oil prices rose in Rotterdam (+15%) due to low seasonal production.

Palm kernel oil prices rose in Rotterdam (+16%) and coconut oil prices rose (+10%).

Ingredients

Milling wheat prices rose in UK (+11%), due to harvest rains.

Oats prices fell on CBOT US (-10%) but remained stable in Finland (0%).

Fruit and nuts

Turkish hazelnut prices increased (+29%), driven by expectations of lower production this year. Almond prices fell in the US (-4%) but increased in Spain (+2%). Almond production for 2016/17 in California has been estimated at 2.05bn pounds, up 8% y-o-y, due to favourable bloom and abundance of rain in the early months of this year.

All Turkish dried fruits have been under downward pressure with apricots down (-10%), raisins (-4%) and sultanas (-1%).

Milk and dairy

On average butter prices continued to increase in the UK (+11%) driven by high global export demand.

EU SMP prices were up (+3%), due to the amount of volume taken off the market into intervention and PSA schemes.

EU WMP prices in the EU increased on average (+5%). Cheddar price increases were seen in the UK (+10%) as a result of higher UK exports.

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