Weaker oils

Palm oil ended its strong rally a week ago now. The run on edible oils came to an abrupt halt as lower export figures coupled with slightly better crops figures all weighed heavily on the market. Also better news about Soya crops meant prices fell back almost as sharply as they rose. It also did not harm that equity markets increased so some money moved there as well. Coconut oil fell back from $1750 to $1550 in a week. Still up from where its started in the $1400 but still much lower. Looking forward prices should remain stable if a little weaker as continued disagreement with OPEC on crude holds back prices there as well.

Desiccated shippers panicked when coconut oil hit $1700 as fear over May and June shipments caused most to withdraw or up their prices significantly. But with oil falling back to just over $1500 the panic for now appears to be reduced. Yes prices are up on before no doubt but we are now talking about a much smaller increase. Competition from Indonesia may even see prices return to early April price quite quickly. But there is no doubt that supply from top quality shippers cannot keep up with demand at the moment.

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