Market Report - December 2011

MARKET REPORT up to December 2011

World economic worries continue to dominate many commodity items and currencies, with prices fluctuating both up and down as the Euro zone demonstrates positive and negative signs.


  • Against the $, sterling opened the month at 1.56 and is at 1.60, 14th November.
  • Against the Euro, sterling opened the month at 1.16 and ended at 1.17 as at 14th November.


Crude oil prices rose in October as Euro zone leaders agreed a third bailout package for Greece. Prices moved up for Brent crude by 5% .Petrol prices in Europe continued to fall by 5% as declines in crude oil experienced in previous months fed through. EU diesel prices rose by 6% on increasing seasonal demand for heating oil 4%, which is produced from the same crude oil fraction.


Soyabean oil fell by 3% on CBOT as the US harvest is progressing well ahead of last year's, and prices fell further by 7% in Rotterdam. South America carried over a large stock of soyabeans into the 2011/12 season and global supplies could be sufficient to cover demand at least until early 2012.

Sunflower oil ended down 6% in both Rotterdam and Argentina, weighed down by the bumper sunflower crop expected this season in the Black Sea region.

Palm oil was also down in Rotterdam by 5% as world production over the past months turned out better than expected, rising 12% year-on-year to 26.4m tonnes.

Rapeseed oil fell by3% in Rotterdam. A shortage of rapeseed will dominate the European market this season, with EU output forecast to decline 8% year-on-year.


SMP prices rose by 2% in Europe. EU SMP exports remain competitive on the world market and this has supported EU prices. SMP prices fell slightly in New Zealand on greater milk supply. Butter prices fell sharply in New Zealand and were also down in the Netherlands.

WMP fell in New Zealand but was up in Europe, following the SMP markets.

Liquid milk prices were up in the UK by 4%. UK milk deliveries in September registered the second consecutive monthly year-on-year decline after a marginal drop was seen in the revised figures for August. UK Mild Cheddar fell by 2%.

EU wholesale egg prices fell on average 2%, but shell eggs for breaking recovered sharply from last month's fall with liquid egg increasing by 5%.


Potato and onion prices in the five main EU producing countries fell 17% on average.


Cocoa beans rose by 4% on ICE but prices were unchanged on LIFFE. Cocoa powder was stable in the UK but cocoa butter saw a sharp fall 19% as there is currently strong competition in this market amidst reports of good supply. Ivorian cocoa deliveries are reported to be well ahead of last year, when the civil war affected the situation.


Beef prices continued to rise 2% in liveweight cattle futures, while South American beef prices generally weakened with Brazilian and Uruguayan deadweight prices both down slightly. EU beef deadweight prices rose, with French , German and Dutch prices increasing. Firm demand for EU beef from export markets, particularly Turkey, combined with lower domestic and imported supplies, has resulted in increased pressure on prices. Pig prices stabilised in the EU, with EU deadweight pork reference prices up 1%.

Deadweight chicken prices in the EU fell by 1% and Brazilian liveweight chicken prices bounced back by 5%, with Thai liveweight prices also up 2%.

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