The effects of La Nina have started to be seen with high temperatures and lack of moisture affecting soyabean and maize crops in South America. Energy prices remained subdued influenced mainly by the economic worries in the eurozone and the likelihood of a return to recession in the EU.
|Potatoes (FR)||+11%||Butter (DE)||-10%|
|Whole Liquid Egg (EU)||+10%||Robusta Coffee (LIFFE)||-9%|
|Milling Wheat (LIFFE)||+10%||Natural Gas (ICE)||-9%|
|Nickel (LME)||+9%||LDPE (Asia)||-8%|
|Palm Oil (MY)||+6%||Tea (LK)||-6%|
|Apple Juice Concentrate (EU)||+6%||Hot Rolled Coil Steel (EU)||-5%|
All percentage changes in this report refer to price movements over the month of December.
Soft markets were generally lower last month amidst renewed concerns over the state of the global economy and the detrimental effect that this could have on demand for soft commodities. Arabica coffee fell (-4%) on ICE in spite of an anticipated 4.1% year-on-year decline in global output to 79.6m bags and Robusta coffee saw even steeper declines (-9%) on LIFFE. Cocoa beans were down on both ICE (-8%) and LIFFE (-5%) as a good West African crop helped to replenish global supplies, with stock levels seen rising by 23% to 1.83m tonnes at the end of 2010/11. In the UK, the price premium of cocoa powder over cocoa butter narrowed further as cocoa powder continued to decline (-3%) while cocoa butter rose marginally (+1%). World sugar prices were lower on LIFFE (-2%) and on ICE (-2%). This 2011/12 season could produce the first global sugar surplus in four years due to ample crops in the EU, Thailand and Russia. Tea prices fell in Sri Lanka (-6%) as production recovered in November, up by 12% year-on-year at 31.2m kg. Kenyan tea prices were also down (-2%) as beneficial rains improved crop conditions in the country.
Oils & Fats
Palm oil prices saw further increases in Malaysia (+6%) and Rotterdam (+3%). Soyabean oil rose on CBOT (+5%), in Rotterdam (+5%) and in Argentina (+3%) as heat and a lack of moisture has affected the soyabean crops in South America. Rapeseed oil prices were up (+4%) in Rotterdam while prices fell in Argentina (-2%). EU rapeseed production is forecast to fall for a second consecutive season in 2011/12 to 19.1m tonnes, down 8% compared to last season. Sunflower oil rose (+2%) in Rotterdam, while prices fell (-3%) in Argentina. A record global sunflowerseed harvest expected this season has helped to push the price of sunflower oil below that of rapeseed, offering traditional users of rapeseed oil a cheaper alternative. Lauric oils also saw increases in Rotterdam for coconut oil (+7%) and palm kernel oil (+15%). Linseed oil ended up in Argentina (+3%) and Belgium (+1%). Olive oil futures fell (-5%) in Spain as did extra virgin olive oil (-5%). Global olive oil production is forecast at a record high of 3.35m tonnes this season.
US maize prices rose (+6%) on CBOT, as did maize futures in the EU (+7%) over the month as global consumption has been forecast to reach a record high of 868.6m tonnes in 2011/12. Increases were seen for both feed wheat futures (+8%) on London LIFFE and milling wheat futures (+10%) on Paris LIFFE with milling wheat prices also up (+6%) on CBOT. Barley prices rose for malting quality in the UK (+2%), France (+1%) and the Czech Republic (+1%) but fell for feed quality in France (-4%) and Germany (-2%). World barley production is expected at 133.3m tonnes, with output in the EU 1% down from last season, at 52.3m tonnes. Oats were up in both the US (+5%) and UK (+7%). Oat production in the EU is forecast at 7.8m tonnes in 2011/12, up 6% from last season but still below the levels seen in 2009/10. Rice prices in Thailand fell back (-4%), with Vietnamese prices down further (-13%). US rice on CBOT fell (-7%). Durum wheat of EU origin fell (-8%) as supply remains ample, with Canadian durum wheat also down (-5%).
Turkish dried fruit saw increases for dried apricots (+16%) and dried figs (+3%). In the EU, currants rose (+2%), sultanas (+1%) and raisins were unchanged (0%). Peanut prices saw strong rises in India (+12%) but falls were seen in Brazil (-5%) and Argentina (-3%) due to the arrival of new season South American supply. EU wholesale peanut prices also weakened (-5%). Turkish hazelnut prices were up (+5%) due to a low crop expected this year. Almond prices fell (-1%) on average due to good US and Spanish supply. In Asia, declines were seen for desiccated coconut (-3%), cashews (-3%) and tapioca starch (-3%) due to subdued demand. Spices generally fell in the EU with declines seen in ginger (-3%), turmeric (-2%) and cloves (-1%). Pepper prices in the EU were also lower, with black pepper (-1%) and white pepper (-2%) both down. Nutmeg, however, ended the month up (+1%). Essential oil prices were mixed with strong rises seen in the EU for ginger oil (+20%), eucalyptus (+17%) and spearmint (+14%) countered by falls in menthe (-2%), clove leaf (-3%), aniseed (-4%) and teatree oil (-7%).
Apple prices in Germany rose for the varieties Elstar (+12%), Jonagold (+6%) and Gala (+1%), which had particularly good quality crops although small sizes were reported to be in short supply; however, Golden Delicious fell (-8%) due to a bumper supply in the EU. Industrial apples were down (-4%) in Poland. EU pears were up (+8%) as a result of limited good supply. Oranges were down in Germany (-3%) and Spain (-17%) as a result of oversupply, although Brazilian oranges were up (+4%) due to reduced production. Bananas rose (+1%) in Germany, as good quality produce was met with increased demand. Lemon prices rose in the UK (+6%) and Germany (+4%) amidst supply pressure. Grape prices were up (+16%) in the EU as worldwide production falls. Kiwifruit declined (-10%) in the UK due to oversupply as the French harvest began before the New Zealand crop had finished. Frozen orange juice prices fell (-3%) on the ICE as good quality juicing oranges are in good supply. Apple juice concentrate rose (+6%) in the EU.
EU potato prices generally rose last month with increases seen in France (+11%), the Netherlands (+10%), Belgium (+10%), the UK (+4%) and Germany (+4%) as most of the produce was put into store where some quality issues arose. French onion prices fell (-17%) while prices elsewhere remained stable as a good quality crop has been seen in the main growing countries. Lettuce prices rose in Spain (+28%), Germany (+11%), France (+8%) and the UK (+3%). The price of EU cauliflowers has risen sharply (+60%) due to the unusually mild weather causing the crops to be ready for harvest too soon, leading to a shortage earlier than anticipated. Tomatoes have risen in the UK (+31%) and Germany (+4%), whilst prices have fallen in Spain (-14%) as production has moved from the UK and the Netherlands to Spain. UK prices rose for carrots (+15%), Brussels sprouts (+11%) and broccoli (+9%).
Meat & Poultry
Liveweight cattle futures rose (+3%) on CME, while price declines were seen for Brazilian (-1%) and Argentinean (-1%) liveweight cattle prices. Beef prices tended to fall in South America with Uruguayan deadweight prices also down (-4%). EU deadweight beef prices were mixed, with increases seen in France (+3%) while falls were seen in the Netherlands (-1%) and Germany (-2%) with prices stable in the UK (0%). New Zealand lamb fell (-2%) but a strong rise was seen in the UK (+12%). Elsewhere, EU lamb prices were more stable with France up (+1%) but slight falls seen in Germany (-1%) and the Netherlands (-3%). EU deadweight pork reference prices were unchanged (0%) on average, while EU piglet prices firmed (+10%) from their previous lows due to a seasonal increase in demand. Deadweight chicken prices throughout the EU were mixed with rises seen in Portugal (+12%) and the UK (+3%), while declines were seen in the Netherlands (-14%), Poland (-5%) and Spain (-5%). Although both Thai liveweight chicken prices (-3%) and Chinese market prices for chicken fell slightly (-1%), Brazilian liveweight chicken firmed (+4%). For fish, haddock fell (-19%) on good EU catches, cod was largely unchanged (0%) while hake rose (+14%) on low supply. EU haddock quotas are set to rise by 15% in 2012, while there are concerns about a potential 11% drop in the Spanish 2012 hake quota. Norwegian farmed Atlantic salmon was sharply up (+25%) from its previous low level.
Milk & Dairy
Butter prices continued to weaken across the markets with price falls seen in Germany (-10%), Belgium (-5%), France (-4%), the Netherlands (-3%), Poland (-2%) and New Zealand (-2%). The likely import of around 30,000 tonnes of butter from New Zealand to the EU domestic market in the first few months of 2012 has acted to weaken European prices. WMP fell in France (-3%) and Germany (-2%) but ended the month up in New Zealand (+3%). SMP food grade prices were up in New Zealand (+2%), Belgium (+1%) and Germany (+1%), while prices fell in the UK (-3%). SMP feed grade prices saw slight increases in Belgium (+1%) and Germany (+1%). Whey powder rose in the Netherlands (+3%) and on CME (+8%). Liquid milk prices fell sharply on average in the EU (-13%). Cheddar prices were steady in the UK (0%), while prices were up in New Zealand (+3%). In Germany, prices were up for Edam (+1%), Emmental (+1%) and Gouda (+1%), while Italian Parmesan was slightly down (-1%). Wholesale egg prices increased (+2%) in the UK, while prices in the EU rose (+5%) on average. EU whole liquid egg prices ended up (+10%), with whole powdered egg also up (+5%).
Crude oil prices declined in December on continuing uncertainty over the eurozone debt crisis with prices down for both Brent crude (-3%) on ICE and light sweet crude (-1%) on NYMEX. Low seasonal demand and threat of recession in Europe weighed on prices for fuels. EU diesel (-2%), US diesel (-2%), heating oil in Europe (-5%), on ICE London (-4%) and on NYMEX (-4%) were all down. Natural gas prices fell in Bacton (-3%), on ICE (-9%) and on NYMEX (-13%) on rising shale gas supplies. European coal prices were also down (-1%). Electricity prices fell sharply in Europe (-25%) on lower fuel costs. Petrol prices bucked the trend, with EU prices up (+2%), and futures rising on NYMEX (+3%). EU naphtha rose marginally (+1%).
Chemicals & Plastics
EU prices for naphtha fell slightly (-1%) as did ethylene prices (-2%). Prices of aromatic chemicals were mixed in Europe with benzene (+14%) and xylene (+5%) both up, while styrene (-2%) and paraxylene (-6%) were both down. Asian prices registered increases for benzene (+7%), toluene (+5%) and xylene (+4%). EU plastics prices remained weak amidst the uncertainty surrounding the global economy, with LDPE (-3%), PP (-4%) and HDPE (-2%) all down. Plastic prices were also subdued in Asia with declines seen for LDPE (-8%), LLDPE (-3%) and HDPE (-4%), while HDPE rose only slightly (+2%). US fertiliser prices weakened with urea (-20%) and diammonium phosphate (-18%) both down sharply, as was Ukrainian ammonia (-16%).
Pulp & Paper
Pulp and paper prices were weighed down by weak demand resulting from the poor state of the global economy. Delivered NBSK pulp was down in the US (-3%) and Europe (-3%), while BHK pulp prices also fell in the US (-4%), China (-2%) and Europe (-1%). Pulp inventories at European ports grew by 3.8% month-on-month to 1.4m tonnes in November due to a decline in consumption within the EU. EU kraftliner (-3%), testliner (-4%), waste-based fluting (-4%) and cartonboard (-1%) were all down over the month. EU newsprint prices were virtually unchanged while graphic paper fell slightly (-1%). EU waste paper saw significant declines (-11%), reflecting subdued demand for recycled paper across the region.
Negative economic sentiment continued to prevail in the metals markets. On the LME, declines were seen for zinc (-6%), tin (-4%) and lead (-2%), while aluminium was steady (0%), copper edged up (+1%), and nickel rose (+9%) in market correction. EU steel prices fell for hot rolled (HR) coil (-4%), cold rolled (CR) coil (-5%) and stainless steel (-2%). Chinese steel prices were also subdued: HR (0%), CR (-1%) and stainless steel slightly up (+1%). CIS prices were steady for HR coil (0%) and CR coil (0%), while US prices were up both for HR coil (+6%) and CR coil (+5%) on positive macroeconomic news. Weak demand weighed on iron ore prices in China: fines (-4%), pellets (-1%). Precious metals fell sharply on NYMEX for gold (-11%), silver (-18%) and platinum (-13%).
Palladium London (+8%), Nylon chips CN (-9%), Silver US (-12%), Baltic Supramax (-13%), Jute IN (-14%).
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