November 2016 Market Report

Pork prices increased in the UK due to a decline in production. Vegetable prices in the EU have risen on average as they are out of season. Sugar prices have fallen on ICE due to higher than expected global supplies in 2016/17. High supplies of Turkish hazelnuts continue to push down on prices.

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Extra virgin olive oil (IT) +35% Hazelnuts (TR) (PL) -15%
Grapes (ES) +31% Cocoa butter (UK) -14%
Rubber (SG) +20% Coal (EU) -12%
Copper LME +18% Sugar ICE London -12%
Cheddar (US) +11% Propylene (EU) -12%
Shell egg (EU) +10% Lamb (NZ) -7%

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

Soft Commodities

Prices for Arabica coffee fell on ICE US (-6%), as the USD strengthened against the Brazilian Real and recent rainfall in key growing areas has improved the prospect for next season’s crop. Robusta coffee prices on London ICE (-6%) fell, as the harvest in Vietnam gathered pace. Sugar prices fell on London ICE (-12%) and ICE US (-5%), due to expectations that the global shortfall for the 2016/17 will be lower than initial forecasts. The global market is now forecast to experience a supply deficit of 2.6m tonnes, down from 4.3m tonnes expected at the start of the year. Tea prices increased in India (+13%), due to a decline in the production and quality of tea as the season comes to an end in North India, while unfavourable weather conditions in South India also added upward pressure. Tea prices also rose in Kenya (+4%) and Sri Lanka (+2%). Cocoa bean prices fell on London ICE (-9%) and ICE US (-8%), due to expectations of oversupply on the global market in 2016/17. Both cocoa butter (-14%) and powder (-6%) fell in the UK. EU molasses remained stable (0%).

Oils & Fats

Soyabean oil prices rose on CBOT US (+4%), in Argentina (+4%) and Rotterdam (+2%). Rapeseed oil prices fell in Canada (-9%) and Rotterdam (-3%), due to improved weather in Canada and a decline in demand from China. Palm oil prices rose in Indonesia (+10%), Malaysia (+6%) and Rotterdam (+1%) as production in Southeast Asia remains weak, due to damage caused to crop by El Niño. Palm kernel oil prices rose in Indonesia (+9%), Malaysia (+5%) and Rotterdam (+2%). Coconut oil prices rose in Rotterdam (+4%), but were stable in the Philippines (0%). Sunflower oil prices fell in Ukraine (-2%), Argentina (-1%) and NW Europe (-1%), but remained stable in Russia (0%). Extra virgin olive oil prices rose in Italy (+35%), due to expectations that domestic production will decline this season as a result of the Xylella fastidiosa infection, untimely spring rains and invasive fruit flies. Meanwhile, prices were stable in Spain (0%). Lampante oil prices rose in Spain (+2%). Linseed oil prices rose in Argentina (+4%).

Grains

Maize prices fell in Brazil (-6%) and on CBOT US (-1%), due to an increase in production. However, prices rose in Argentina (+5%) and remained stable on Euronext Paris (0%). Milling wheat prices rose in the UK (+2%), due to a higher quality crop this season. Elsewhere, milling wheat fell on CBOT US (-3%) and in Germany (-1%), but remained stable on ASX Australia (0%) and Euronext Paris (0%). Prices for UK feed wheat rose (+3%), due to an increase in harvest quality, limiting the availability of lower quality feed wheat. Feed wheat prices also rose on ICE Europe (+1%), but remained stable in Hungary (0%). Durum wheat prices rose in Italy (+7%), the US (+6%), ICE Canada (+4%) but fell in France (-4%). Barley feed prices rose on ASX Australia (+9%), ICE Canada (+6%), in France (+4%) and Germany (+2%), due to yield and quality concerns. Prices for basmati rice rose in both India (+17%) and Pakistan (+15%). White paddy rice prices fell on CBOT US (-6%), but rose in Thailand (+1%) and Vietnam (+2%). Oat prices increased on CBOT US (+5%), but fell in Finland (-2%).

Ingredients

Turkish hazelnut prices continued to fall in November (-15%) due to high supplies. Spanish almond prices rose (+5%), while prices also increased in the US (+4%). For peanuts, prices increased in US (+3%), Argentina (+2%) and Brazil (+1%). Cashew prices were up in India (+6%). For dried fruit, Turkish prices increased for both dried apricot (+5%) and sultanas (+3%) however, prices fell for raisins in both Turkey (-3%) and the US (-3%). In addition, desiccated coconut prices remained stable in the Philippines (0%). For spices, black pepper prices fell in Malaysia (-31%), Indonesia (-16%), Vietnam (-6%) and India (-4%). White pepper prices also fell in Malaysia (-20%) and Indonesia (-1%). Pepper prices continue to fall, due to increasing global supplies. On India’s NCDEX, prices increased for coriander (+11%), while prices for turmeric fell (-3%). Indian dried garlic prices increased (+29%), but dried ginger prices fell (-8%) as did chilli (-14%). In the German market, sesame seeds continued to fall (-8%), as did Czech poppy seeds (-3%).

Fruit

Apple prices in the EU rose (+4%) on average, with increases seen in Poland (+35%) and the UK (+3%), but prices fell in Germany (-7%). Pear prices in the EU rose on average (+4%), with prices up in Poland (+15%) and Spain (+4%). Pear prices fell in France (-1%) and remained steady in the UK (0%). Pineapple prices were down in the UK (-60%), Spain (-31%) and Costa Rica (-3%). Banana prices rose in the UK (+10%) and Poland (+2%), while remaining unchanged in Germany (0%), but fell slightly in Spain (-1%). Plum prices rose in Spain; however, remained stable in the UK (0%) and Poland (0%). Grape prices were up in Spain (+31%) and the UK (+19%). In the juice market, apple juice concentrate in China declined (-4%), while frozen concentrated orange juice rose in the US (+1%) on ICE. Orange production in the US has been forecast at 124m boxes in 2016/17, down 10% y-o-y, due to the adverse effects of the citrus greening coupled with post bloom drop.

Vegetables

Potato prices increased on average (+9%) across the EU with increases seen for Germany (+12%), Poland (+10%), Belgium (+8%), France (+6%), UK (+6%) and Spain (+3%). Lower potato yields from the latest European harvest have kept potato prices climbing this year. Onion prices were mixed last month, falling on average (-1%) across the EU. Prices rose in Poland (+17%), Netherlands (+4%), and Spain (+2%), remained unchanged in the UK (0%), but fell in Germany (-5%) and France (-13%). Tomato prices were up in both the UK (+29%) and Spain (+8%), with cherry tomatoes falling in Germany (-35%). Prices rose for courgettes in the UK (+67%) and Spain (+33%). Lettuce prices rose on average (+17%) across the EU. In the UK, prices fell for parsnips (-4%) but remained steady for turnips (0%). Leek prices fell in Netherlands (-6%) and Germany (-2%), remained stable in the UK (0%), but rose in France (+2%). Carrot prices declined in Poland (-26%), the UK (-7%) and Germany (-4%), but were unchanged in France (0%).

Meat & Poultry

Prices for deadweight beef rose in November for the EU (+1%), supported by increases from the UK (+2%) and France (+1%). However, the overall price was offset by a decline in Ireland (-1%) and stable prices in Germany (0%). Beef prices fell outside the EU, with prices down in both Brazil (-6%) and Australia (-2%). Overall lamb prices remained stable in the EU (0%), as prices fell in Greece (-7%), Italy (-5%), Germany (-4%), the Netherlands (-4%) and Poland (-4%), while being offset by price rises in the UK (+1%) and Spain (+4%). In New Zealand, lamb prices fell (-7%) as production increases seasonally. Pork prices continued to decline in the EU (-3%), due to a slowdown in exports to China. Prices fell in Spain (-6%), France (-3%), Poland (-3%), Belgium (-3%), Greece (-2%), Ireland (-2%) and the Netherlands (-1%). However, pork prices rose in the UK (+7%), due to a decline in production. Pork prices also rose in the US (+9%). Deadweight chicken prices fell in Portugal (-3%), but were stable Brazil (0%) and the EU (0%).

Milk & Dairy

EU dairy prices have continued to increase in November; however, have showed some signs of slowing down as buyers hold off purchasing large volumes. Butter prices rose in New Zealand (+8%) due to tightening supplies, while also increasing in the EU (+3%) and the US (+2%). In the EU, prices increased in the UK (+3%), France (+3%) and Belgium (+3%), while remaining stable in Germany (0%), and falling in Poland (-1%). Cheddar prices increased in the US (+11%) as the USDA bought up excess stocks to limit supply. Cheddar prices also increased in New Zealand (+9%) and the UK (+5%). EU Gouda prices continued to increase (+6%), along with EU Edam (+4%) and Italian Parmesan (+4%). In the EU, SMP prices fell (-3%), with prices down in France (-5%), Germany (-4%) and the Netherlands (-3%), due to low international and domestic demand. For WMP, prices increased in the EU (+6%), with the Netherlands (+12%), France (+6%) and Germany (+4%) all going up. Shell egg prices increased in the EU (+10%), with prices up in Spain (+20%), France (+19%) and Germany (+17%). In addition, prices increased for EU processing eggs (+14%) and whole liquid eggs (+11%).

Chemicals and Plastics

Primary plastic feedstock cost in the EU mostly fell, with propylene (-12%), ethylene (-8%), benzene (-2%) and paraxylene (-1%) all going down due to lower demand. But butadiene (+6%) and orthoxylene (+2%) prices rose, while ethylene glycol (0%) and toluene (0%) remained stable. For the EU plastic market, PET (+2%) and PS (+1%) prices rose, while PP (0%), HDPE (0%), LDPE (0%), LLDPE (0%) and PVC (0%) prices remained stable. Plastic feedstock cost also decreased in China for butadiene (-12%), ethylene (-10%). But, plastic prices rose for LDPE (+3%), PET (+2%), PVC (+1%) and LLDPE (+1%), while falling for HDPE (-1%). For fertilizers, Urea (+17%) and phosphoric acid (+1%) prices rose in the US, while DAP (-2%) prices decreased.

Pulp & Paper

Global pulp shipments fell 10% m-o-m in October to 3.77m tonnes, remaining stable y-o-y. Global pulp inventories stood at 39 days of supply in October, up 1 day m-o-m and 3 days y-o-y. European softwood pulp inventories fell 3% m-o-m in October, down 13% y-o-y to 0.20m tonnes. In days, softwood pulp inventories remained stable m-o-m but fell by 2 days y-o-y to 17 days of supply. In Europe, BHK (+2%) and NBSK (+2%) prices rose m-o-m in November due to low supply. Testliner (-2%) and fluting (-1%) prices both fell m-o-m due to high supply, but Kraftliner prices remained stable (0%). Newsprint (0%) prices remained stable, but coated paper (-1%) prices fell in Europe. In China, BHK (+3%) and NBSK (+1%) prices rose but in the US, prices for NBSK (0%) remained stable.

Energy

Crude oil prices rose in November for Brent crude oil prices on ICE London (+9%) and light sweet crude oil on NYMEX US (+8%), due to OPEC and non-OPEC members agreeing to production cuts of 1.2m bbl/d from January 2017. Diesel prices fell in the US (-10%) and the EU (-4%), along with petrol prices in the EU (-4%) and the US (-3%), due to rising stocks and decline in crude oil prices. Gas oil prices on ICE fell (-2%). Natural gas prices at the Bacton terminal NBP (-3%) and on ICE London (-3%) fell as imports from Norway and the Netherlands left the system over supplied. Natural gas prices on NYMEX US (-1%) fell due to rising stocks. Coal prices fell in the EU (-12%), due to a recovery in production in China after heavy rains eased. Coal prices remained steady in the US (0%).

Metals

Base metal prices on the LME rose over speculation for higher consumption in the US following the election. Prices also rose as investors in China turned to USD dominated assets due to the weaker renminbi. LME Copper (+18%) rose the most, followed by nickel (+11%) and zinc (+10%), lead (+6%), aluminium (+5%) and tin (+4%). EU prices increased for hot rolled (HR) (+5%) and cold rolled steel (CR) (+4%), due to an increase in feedstock coking coal prices. Prices for HR (+18%) and CR (+17%) steel in China rose, supported by tight supply. US HR (+15%) and CR (+10%) steel prices were also up.

Others

Rubber SG (+20%), Nylon chips CN (+12%), Lumber US (+5%), Cotton US (+2%), Silk CN (-1%), Wool AU (-4%), Viscose CN (-10%).

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