Bakery Suppliers and Catering Suppliers

MARKET REPORT Up until January 2012

Commodity markets remain very uncertain with most categories treading water while the world tries to sort out its financial situation.

EXCHANGE RATES

• Against the $, sterling opened the month at 1.60 and is at 1.5 as of the 08th December.
• Against the Euro, sterling opened the month at 1.17 and ended at 1.17 as of the 08th December.

CRUDE OIL

Brent crude oil prices rose slightly in November by 2% despite tight fundamentals due to concerns over the deepening eurozone crisis and slowing growth in China. Light sweet crude oil moved up sharply on NYMEX by 11% on the news that infrastructure constraints that had led to a surplus of oil in the Midwest is set to be resolved, shrinking the price differential between Brent crude and NYMEX crude. Petrol prices were down in the EU by 3%, while diesel was steady.

FATS AND OIL

Price increases continued to be seen in palm oil, with prices up in Rotterdam and Malaysia by 2% as production has started to decline seasonally in the main growing regions. The return of La Nina weather patterns will bring heavy rain to the region which is likely to delay harvesting in the next few months.

Soyabean oil fell on CBOT by 2%, as global soyabean production has been revised slightly up from October's estimates to reach 258.9m tonnes due to larger crops expected in South America. Rapeseed oil prices rose slightly in Rotterdam as global supplies are expected to decline to a 3 year low. Rapeseed production in the EU is forecast at 19.1m tonnes in 2011/12, down 8% from last season.

Sunflower oil continued to fall in Rotterdam as ample supply is expected this season. Prices of lauric oils strengthened sharply over the past month, with palm kernel oil and coconut oil up sharply by 19%.

WHEAT

Both feed wheat and milling wheat prices fell by 5% on LIFFE. The 2011/12 world wheat production forecast has been revised up 2.1m tonnes from last month's estimates to 683.2m tonnes, which would be close to the record crop seen in 2009/10.

DAIRY

Butter prices in the EU decreased by 6% on average following the downtrend in world prices. An increase in the rate of release of butter from the EU Private Storage Aid scheme has led to increased supply.

WMP fell in the EU by 2%) but ended up in New Zealand 14% as global demand was encouraged by the earlier low prices. SMP prices fell slightly on average in the EU, but rose in New Zealand by 11% despite milk production being at its seasonal high.

Cheddar prices fell in the UK by 2% due to increases in production

EU eggs prices were up by 11% as sellers maintain higher asking prices due to expected consumer demand increases at this time of year and EU whole liquid egg was up by 15%.

COCOA

Cocoa beans fell 13% as West Africa is expected to produce a second successive bumper crop while demand from Europe, which consumes around 40% of the world's cocoa, may be affected by the ongoing economic problems within the eurozone. In the UK, the price premium of cocoa powder over cocoa butter, which had been increasing since June, narrowed last month as cocoa butter prices recovered by 6% and cocoa powder continued to fall.

BEEF

EU beef deadweight prices generally rose last month, touching record highs amidst tight global supplies and robust world demand. Most countries within the EU saw price rises with Irish up 8% and other EU sources up 2-3%. Beef prices in Brazil continued to weaken with live weight prices down 2%.