Agricultural commodities fell as traders weighed a better outlook for global food supplies. The supplies with signs pointing to Indonesia. It is for growing palm oil exports and a large harvest of Russian wheat this season.
Palm oil plunged further into a bear market. Palm oil fell about 9% on Monday and another 1.8% on Tuesday, as Indonesia’s top carrier ramps up shipments. That’s a change from late April. Prices hit an all-time closing high. It happened when the country temporarily banned palm oil exports. It is for cool domestic food inflation. The war in Ukraine restricted trade in sunflower oil.
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In Chicago, wheat and corn prices fell about 2% as trading resumed after a holiday. Due to the price drop, the outlook for North American wheat supplies is recovering. The analysts continue to raise their estimates for Russia’s wheat crop. As a result, the wheat crop expects to be near or at a record after favorable spring weather.
The declines offer some relief for consumers around the world. As a result, most people face rising living costs and growing food insecurity. The United Nations food price index has declined from an all-time high in March. The index declined after Russia’s invasion choked off exports from Ukraine. Ukraine is one of the top carriers of grains and vegetable oils.
“There are signs that the global food crisis may be approaching its peak,” said Chua Hak Bin. Chua Hak Bin is an economist at Maybank Investment Banking Group. He added that the fall in palm oil will reduce pressure on cooking oil prices.
Indonesia is speeding up palm oil shipments to “wipe out” its overflowing reserves. As a result, palm oil shipments speeding is a move that will challenge shipments from rival Malaysia. Data shows that Malaysia’s exports fell more than 10% in the first 20 days of June from the previous month. Volumes sank in India and Europe but increased in China.
Price increases for edible oils in China. The price increase will likely end the restoration of the palm oil supply, according to Chen Bin. Chen Bin is a Shandong-based analyst at Shanghai Ganglian E-Commerce Holdings Co. Given that palm is the world’s most used edible oil and a key raw material in the food processing industry. Falling prices will ease global food inflation, he said.
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