The Hindu Business Line : FAO sees firm trend in vegoil, meal prices

Mumbai June 11 Surging feed grain prices are lifting oilseeds and meal prices higher, and this is happening despite ample supplies this year relative demand, the Food and Agriculture Organisation (FAO) said in its latest Food Outlook.

Unusually high maize (corn) prices are dragging up soyabean prices as the two commodities are competing in both feed and energy markets, the agency noted.

The firmness in vegetable oil prices mainly reflects poor harvest of high yielding crops and a slowdown in palm oil expansion, against the backdrop of rising demand for biofuels, it added.

First forecasts of 2007-08 marketing season suggest that the steady growth in global oilseed production could come to a halt, as maize cultivation is likely to expand at the expense of soyabean, according to Food Outlook.

Demand

Given the continued rise in oil and meal demand, this would cause global ending stock levels to fall after three years of growth, which, combined with tightness in cereal markets, would point to continued firm prices in the oilseeds complex for the rest of the year.

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