Global Food prices soar, inflationary pressure heats up! Foreign news reports, South America’s bad weather caused a global shortage of oilseed supply, from cooking oil to raw fuel are greatly affected, coupled with the continued drought in Argentina, Brazil rainstorms, the situation may worsen, resulting in soybean and cooking oil futures around the world generally rose sharply.
Tight oilseed supply has pushed Chicago soybean futures prices to a near 7-year high, and Paris canola oil futures have hit a record high, with canola oil traded in Canada soaring in tandem with the market. The uptrend spread to the edible oil exchanges in Chicago, Kuala Lumpur and Dalian.
U.S. soybean supplies have fallen to the lowest in several years, and traders are waiting with bated breath for the latest inventory estimates recently released by the U.S. Department of Agriculture. The market is closely watching demand forecasts for South American production and China, the world’s largest importer. U.S. arable area this summer can be expanded as expected, weather changes, but also enough to greatly affect the crop harvest. In addition, the demand side is not without concern. In recent years by the African swine fever attack in China, and the emergence of new strains of virus, worrying about the number of pigs may slow down the speed of recovery, and thus inhibit the demand for soybeans and corn for feed.
Soybean stocks low, Brazil harvest at 10-year low
U.S. soybean stocks are expected to fall to a seven-year low, and analysts expect data released by the U.S. Department of Agriculture to show a further contraction in stocks. The report cited Commonwealth Bank of Australia analyst Gorey pointed out that Brazil’s soybean harvest was affected by wet weather, and Argentina’s hot and dry weather is also threatening the local soybean harvest. Data from AgRual, an agricultural consultancy, also showed that Brazilian farmers were estimated to have harvested 35% of the soybean planted area by the beginning of the month, a rate lower than the 49% a year ago and the lowest in 10 years.
African swine fever expands Asian meat prices
On the other hand, Asia is re-emerging African swine fever Epidemic, not only China and Vietnam outbreak again, Malaysia also found, and is a variant of the virus, which may push up local pork prices, under the pressure of rising food Inflation, will increase the difficulty of central bank governance.
Although the African swine fever epidemic areas in Asia are scattered and unrelated to each other, governments have raised the alert to prevent the epidemic from getting out of hand. According to foreign media reports, it is still unclear whether African swine fever will cause harm to humans, and there is no commercial vaccine; authorities rely on strict biosecurity measures and culling of infected pigs to control the outbreak.
China has half of the world’s pigs, and outbreaks are currently occurring in Hebei, Henan, Sichuan, Yunnan and Xinjiang. The newly discovered variant of the virus is weaker, but more difficult to detect. The government originally expected to have the herd back to normal by the middle of the year, but now it may not meet the target. Commodity markets are closely watching the recovery of the Chinese herd as it is a matter of the amount of soybeans, corn and other grains and pork that China imports. The market expects Chinese pork prices to remain high and imports to reach another record high.
Vietnam has culled about 2,000 pigs in January and February this year, and the outbreak has been reported in more than 20 regions across the country. The government is expected to start vaccine production in late June or early July. Malaysia’s first outbreak of swine fever in February, Sabah has 3,000 pigs have been culled, the local government reported on the 7th that the virus has spread to other areas, but no cases have been reported in commercial pig farms supplying meat. As for South Korea, no epidemic has been reported so far, the government said it will strengthen preventive measures before the wild boar breeding period in April to May and strengthen border quarantine from the end of February.