March 2012 Market Report

 

Dairy prices continued to weaken supported by good supplies seen across the markets. Downward revisions to global economic growth, especially for China, have caused most metal prices to weaken as demand is likely to be reduced as a consequence.  


Up Down
LDPE (EU) +11% Potatoes (NL) -18%
Liveweight Cattle (AR) +11% Frozen Orange Concentrate (ICE) -12%
Petrol (EU) +9% Nickel (LME) -11%
Tea (LK) +5% Butter (FR) -11%
Palm Oil (MY) +5% Cocoa Butter (UK) -8%
NBSK Pulp (EU) +3% Maize (CBOT) -6%

All percentage changes in this report refer to month-on-month price changes.

Soft Commodities

Arabica coffee prices continued to fall (-9%) on ICE as good crops in Brazil and Africa are expected to offset some of the declines in Colombia and Central America resulting from adverse weather conditions. Robusta coffee was up (+2%) on LIFFE. The price of cocoa and its products also saw movement over the month. Cocoa beans rose (+2%) on LIFFE while prices fell slightly (-1%) on ICE. In the UK, prices declined for cocoa powder (-6%) and cocoa butter (-8%). World cocoa grindings in 2011/12 are expected to grow by 2% to 3.99m tonnes due to increased demand. Tea prices ended the month unchanged (0%) in Kenya, while prices rose (+5%) in Sri Lanka. In January, Kenyan tea output remained slightly up year-on-year at 36.2m kg. World sugar prices fell on LIFFE (-5%) and on ICE (-6%) supported by estimations of a world sugar surplus of 8m tonnes expected in 2011/12 due to large harvests in India, the EU, China and Thailand. Molasses prices were down (-4%) in Germany.

Oils & Fats

Soyabean oil prices rose in Rotterdam (+3%) and on CBOT (+1%), while prices in Argentina fell slightly (-1%). Soyabean prospects in South America deteriorated further at the start of March, with very high temperatures affecting the soyabean crop in Brazil although the drought is now officially over for some parts of Argentina. Sunflower oil rose in Rotterdam (+2%), while prices were unchanged in Argentina (0%) as exports from this country have exceeded expectations. Palm oil prices rose in Rotterdam (+3%) and Malaysia (+5%) as palm oil supply has started to show the expected seasonal slowdown in February. Rapeseed oil prices rose slightly (+2%) in Rotterdam, while prices were unchanged in Argentina (0%). In lauric oils, coconut oil prices continued to fall in the Philippines (-7%) and in Rotterdam (-4%). Palm kernel oil rose in Malaysia (+2%), while prices in Rotterdam fell slightly (-1%). Linseed oil fell in Argentina (-1%) and in Belgium (-1%). In Spain, olive oil futures ended up (+6%) with extra virgin olive oil (+3%) also up.

Grains

Milling wheat futures fell on LIFFE Paris (-4%) and on CBOT (-4%), but rose (+3%) on ASX in Sydney. Milling wheat prices in the cash market were also mixed, with increases seen in the UK (+2%), the US (+1%) and Germany (+1%), but falls seen in France (-1%) and Canada (-1%). Maize futures were up (+2%) on LIFFE Paris, while prices were down (-6%) on CBOT. Maize prices in the cash market trended upwards in the EU, with increases seen in Germany (+3%) and France (+2%). Feed wheat prices rose (+4%) on LIFFE London mainly supported by maize prices. Feed quality barley prices rose in Germany (+4%) and France (+1%), while prices fell slightly in the UK (-1%). Malting quality barley fell in France (-6%) and the UK (-6%). Oat prices continued to rise in the US (+6%), while prices fell (-2%) in Finland. Rice prices in Thailand ended the month slightly down (-1%), with paddy rice prices also down (-3%) in Spain, while basmati prices were unchanged (0%) in Pakistan. US rice on CBOT continued to rise (+4%). Durum wheat fell in Italy (-1%) and Canada (-1%).

Ingredients

Peanuts from the US, Argentina and Brazil all fell (-2%) in Europe last month on hopes that increased global planting, as a result of higher prices year-on-year, will raise supply. Chinese prices, however, rose (+2%) due to strong domestic demand. Cashew nuts fell (-10%) in Rotterdam due to good arrivals following harvests, with prices also slightly down (-1%) in India as the February-March picking season draws to a close. Spanish almonds rose (+1%) and Turkish hazelnuts were also up (+2%). In dried fruit, decreases were seen for Turkish dried figs (-10%), sultanas (-5%) and raisins (-2%) whilst dried apricots rose (+5%). Desiccated coconut prices were down (-10%) in the Philippines on improved supply. In spices, Indian turmeric futures declined (-8%) due to low demand and good supply. Steady prices were seen for cumin (0%), and Chinese garlic powder (0%), while increases were seen for cardamom (+18%), coriander (+4%), black pepper (+2%) and Indian ginger (+2%). The price of Madagascan vanilla increased sharply (+29%) due to recent damage caused by the severe tropical storms Giovanna and Irina which both hit the island in the second half of February.

Fruit

Apple prices generally trended upwards in the EU as the end of the northern hemisphere supply approaches and stocks are reduced. Apple prices in Germany rose (+3%) on average, with the Gala variety seeing the largest increase (+12%). Industrial apples also rose (+5%) in Poland. Lemons were up (+5%) on average in the UK and Germany. Brazilian oranges delivered in Germany rose (+5%), while Spanish Navelina was up sharply (+29%). Florida oranges in the US also rose (+10%). Bananas rose in the UK (+7%) and Germany (+1%) as supply from Ecuador was disrupted due to floods. Grapes ended down (-12%) in the UK as good supply from Chile and South Africa arrived in the market. Strawberries in Germany were down (-2%). Frozen orange concentrate dropped (-12%) on ICE NY due to weak demand on the futures market and favourable weather conditions in Florida.  

Vegetables

Potato prices saw declines across the major growing regions of Europe with falls in the Netherlands (-18%), France (-13%) and Germany (-4%) due to lower demand and high stock levels, while prices in the UK rose (+5%). Tomato prices fell in Spain (-8%), the UK (-7%) and Germany (-6%) as improved weather led to a good supply of good quality tomatoes. Lettuce prices began to return to normal levels, after the cold weather in February, with declines seen in Germany (-34%), Spain (-19%), France (-7%) and the UK (-5%). Cucumber prices also fell sharply across Europe (-26%) as supply returned to normal. Broccoli prices registered declines in Germany (-43%), France (-18%), the UK (-17%) and Spain (-7%). Carrot prices fell in France (-5%) and Germany (-2%) while prices increased in the UK (+5%) where a lack of rain is reducing growth. Cauliflower prices fell sharply across Europe (-43%) as supplies increased from Northern European countries where good quality harvests have been reported.

Meat & Poultry

Brazilian liveweight cattle prices continued to fall (-2%), while price rises continued for Uruguayan (+6%) and Argentine (+11%) cattle. EU deadweight beef prices rose on average (+1%) with the largest gains seen in Spain (+5%), Ireland (+2%) and Germany (+2%), while prices fell in the Netherlands (-3%). New Zealand lamb fell (-3%) as more new season lambs are coming through, while prices in the UK remained steady (0%). Elsewhere, EU lamb prices were mixed with prices down in France (-2%) and Ireland (-1%) while large price increases were seen for the Netherlands (+18%), Germany (+13%) and Poland (+10%). EU deadweight pork reference prices rose (+1%), with larger gains experienced in Spain (+4%) and the UK (+3%). EU piglet prices continued to rise (+6%) as producers are still trying to increase the size of their herds by retaining piglets. Deadweight chicken prices throughout the EU remained stable (0%), with increases seen in the Netherlands (+5%) and Belgium (+4%) offsetting falls seen in the UK (-6%) and Poland (-3%). Brazilian chicken prices fell (-4%) while Chinese liveweight market prices for chicken increased (+5%). Thai liveweight chicken prices fell sharply (-18%) as a high level of production was met with weak demand. For fish, Norwegian farmed Atlantic salmon prices continued to rise (+3%), while the price of cod increased sharply (+15%) in the EU.

Milk & Dairy

Butter prices throughout the EU continued to fall this month, down in France (-11%), Germany (-9%), the Netherlands (-8%) and UK (-7%), mainly due to high supply and lower demand. Cream prices also followed this trend with prices down (-4%) in the EU. The EU butter Private Storage Aid (PSA) scheme has seen more activity than expected, with around 47% more supply put into the scheme as of mid-March compared to last year. In dairy powders, SMP saw declines in Germany (-8%), Belgium (-6%) and France (-5%). WMP also fell in the Netherlands (-5%), Belgium (-4%) and France (-4%). Fresh milk deliveries in the EU amounted to 11.4m tonnes in January, a 1.3% increase on January 2011. The average EU farmgate price fell (-1%) over the year end from December 2011 to January 2012. In the UK, milk deliveries for the two weeks ending 17th March 2012 were 0.8% higher than the same period last year. Irish cheddar cheese fell slightly (-1%), but US cheddar rose (+5%). German Edam fell (-3%) with Italian Parmesan also down (-2%). Wholesale egg prices continued to increase and were up in the EU (+32%). Liquid and powdered egg products were also up (+20%) on average in the EU.

Energy

Brent crude oil rose (+2%) on ICE but light sweet crude was down (-1%) on NYMEX. Petrol prices, however, rose in the EU (+9%) and on NYMEX (+2%) as previous rises in crude oil prices fed through. The cost of diesel was also up in the EU (+2%) but fell slightly in the US (-1%). EU prices for heavy fuel oil and naphtha were unchanged (0%). In the US, heating oil ended up (+1%). Gas oil was up (+1%) in the EU, while gas oil futures moved higher (+2%) on ICE London. Natural gas futures rose on ICE London (+1%) but fell on NYMEX (-11%) amidst ample US supply. UK Bacton prices were unchanged (0%). EU electricity prices fell (-25%), aided by warmer weather in Europe. EU coal prices rose (+2%) due to higher industrial demand.

Chemicals & Plastics

Chemical prices remained mixed with increases seen in the EU for propylene (+15%), ethylene (+9%), monoethylene glycol (+8%), paraxylene (+4%) and toluene (+1%). Prices were steady for xylene (0%), while falls were seen for benzene (-7%). Plastics were also mixed, with EU prices up for LDPE (+11%) and PVC (+4%), unchanged for PET (0%) and LLDPE (0%), while price falls were seen for HDPE (-2%) and PP (-1%). In Asia, prices remained more supported with increases seen for HDPE (+6%), LDPE (+5%), PP (+3%) and PVC (+1%), while PET (0%) was unchanged. In fertilisers, price increases were seen in the US for urea (+21%), and diammonium phosphate (+3%) on strong planting demand.

Pulp & Paper

European softwood pulp prices were buoyed by robust export demand, whilst domestic demand was weak. NBSK pulp prices rose in Europe (+3%), whilst delivered NBSK pulp prices remained steady in the US (0%). BHK pulp prices continued to rise in both Europe (+6%) and China (+5%). February pulp stocks at European ports fell by 12% to 1.1m tonnes on the previous month. EU kraftliner (0%) and cartonboard (0%) were unchanged, whilst prices recovered for waste-based fluting (+11%) and testliner (+4%). Also in the EU, newsprint prices (0%) and uncoated reel paper (0%) were again unchanged, whilst coated reel paper prices ended down (-2%). In the UK, kraftliner prices were up slightly (+1%), whilst waste-based fluting prices were unchanged (0%).

Metals

Prices fell on LME, with declines seen for lead (-12%), nickel (-11%), tin (-8%), aluminium (-7%), zinc (-6%) and copper (-2%). China's GDP growth target in 2012, a key driver for global demand growth, is forecast at 7.5%, down from the 9.2% registered in 2011. EU steel prices were subdued with cold rolled (CR) coil down (-1%), whilst hot rolled (HR) coil remained unchanged (0%). Chinese steel coil prices were slightly up for HR (+1%), whilst falls were seen for CR (-1%). CIS prices rose for HR coil (+2%), but remained steady for CR coil (0%). US prices fell for HR (-4%) and CR (-4%) coil. Stainless steel prices were also down in Europe (-4%) and China (-4%). Price increases were seen for iron ore pellets (+6%) and fines (+2%) in China.

Others

Baltic supramax Index (+48%), raw silk CN (+8%), cotton US (+3%), polyester CN (-7%).

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