The prices of sunflower and soybean oils, main oils used in tuna cannery, are expected to rise in the next few months to new heights. Prices already reached record levels with up to 50 percent rises since this summer due to bad harvests and pressure from future commodity markets, according to traders.
With current prices around Euro 1100 per ton for soybean oil and Euro 1250 for sunflower oil, prices are on the rise. Traders expect this trend to continue at least until next April, when the results of new oil seed harvests will be public.
Prices of soybean were on a level around Euro 730 in June this summer and rose to a level of Euro 950 in November. The current price of Euro 1100 is expected to rise even more in the coming months. Sunflower oil rose from Euro 850 in June to the current level of Euro 1250-1300.
The price-rises are mainly the result of extreme wet weather situations in the different agricultural areas. These circumstances have resulted in bad harvests, says Pieter Spierenburg, trader of the Dutch United Oil processors (Nederlandse Verenigde Oliefabrieken). “Basically it’s the bad weatherâ€, Mr. Spierenburg states. Rains during the summer have resulted in relative low production of rapeseed oil. As such, the soybean harvest has not been bad, but because oils are used as substitutes for each other, other seeds had a general impact of rising price levels. According to Mr. Spierenburg the trend of rising prices was boosted by traders of hedge funds and future markets who are holding long positions expecting more future rises of the oilseed prices. “Everybody tries to cover its positionâ€, says Mr. Spierenburg.
The pressure on rising prices is expected to hold at least until April. “Then we know the results of harvests from South Americaâ€, says Mr. Spierenburg. According to the trader, the rising demand and the use of vegetable oils for alternative car fuels are not responsible for the latest wave of rising prices.
