The increase in the price of gas in the EU supports the prices of vegetable oils
Russia continues the war against Ukraine and the entire civilized world, and uses its favorite weapon – gas blackmail. Gazprom is reducing the volume of deliveries through Nord Stream-1, as if due to the untimely return of turbines from repairs due to sanctions. As a result, August gas quotations in the EU have risen by 30% since the beginning of the week to almost $2,500/thousand m 3 , and in general, since June 14, when Gazprom limited Nord Stream supplies, the price has risen 2.5 times.
In addition, prices are supported by the drop in electricity production of wind farms due to the lack of winds, so instead of building up gas reserves for the winter, it has to be spent on electricity production.
Gas prices reached a historical record of more than $2,900/thousand m3 on March 7 amid the height of the war in Ukraine.
EU countries reached a political agreement on July 26 to voluntarily reduce the demand for natural gas by 15% already in winter, in order to reduce the volume of gas imports from Russia.
Against the background of rising gas prices, oil prices have risen by 3% since the beginning of the week to $107/barrel, which, in turn, supports quotations for vegetable oils and oilseeds, which are used in the production of biodiesel.
- Palm oil futures on the Malaysian exchange yesterday rose 1% to 3,826 ringgit/t, or $858/t.
- August soybean oil futures in Chicago yesterday rose by 1% to $1,348/t.
- August rapeseed futures on the Paris MATIF rose another €22/t to €663.75/t or $677.6/t, adding 4.8% since Monday and fully reversing last week’s decline.
If gas prices do not fall, the prices of fertilizers and corn drying will soon rise, which will lead to an increase in the price of corn.
For the second time in 28 years, the US Federal Reserve raised the benchmark interest rate by 0.75% to 2.25-2.5% to keep the US inflation target at 2% over the long term. Such a move will restrain the growth of commodity prices in the US.
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