Prices of agricultural commodities are falling; what is leading to the fall

Fall in Palm oil prices have given a sigh of relief to fast moving consumer goods companies. Meanwhile, correction in the prices of other agricultural commodities has also given a much-needed relief, Zee Business' Neha Anand tells in this report.

Palm Oil has witnessed a correction of 10% in the BM market since Indonesia has increased the export Quota. Also, this is the season of production in Indonesia and Malaysia, Anand stated in the report.

Palm Oil is at lows of 6.5 month since we witnessed Soya bean rates hitting low in the Chicago market. Correction in Palm Oil, Soya bean Oil, meals has been witnessed by 2-2.5 per cent in the Chinese market. The supply pressure that has been created immensely in the market and dollar index that has been strong, 105 approximately, this too has created a pressure in the market, she further said.

Correction has been seen in the prices of wheat, as well, she added. Bizarre conditions were created in the US market last week. Fear of recession is prevailing all over. The Northern Hemisphere is facing excessive harvest pressure to an extent that even markets which don't produce grains have started to export grains too.``, she said.

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Egypt has got wheat imported from France, where an unusual volume of wheat has been produced in contrast to getting wheat imported from the market of Russia," she added.

Soft winter wheat from America has come to the market. North African countries are buying wheat from America. The typical traditional wheat produced in Russia is facing pressure. They have reduced the export tax. Week by week rates have been reduced by 25-30 dollars. Sanctions are lying down, therefore, no one is there to buy the produce, she further added.
Wheat prices have witnessed a correction of 11% and closing was seen at a four-month low, she stated.

Maize has hit a 5-month low while raw sugar has hit a 4-month low.

Price of wheat has fallen about 35 per cent from the peak price. Palm Oil has witnessed a correction of 42% from its peak price. Cotton has seen a correction of 32 % from its peak price.7.5 to 11.5 percent of correction has been seen in sugar, maize, soybean."

FMCG stocks are reflecting all the conditions. A relief has been seen since correction in process has been seen not just in palm but most agricultural commodities.