Record-High Global Food Prices Imminent As Edible Oil Soars

Edible oil prices soared this week, prompting fears that record-high food prices could be imminent. On Wednesday, soybean oil futures in Chicago hit their highest levels since 2008, and palm oil, the commodity used in thousands of food products, jumped to new highs.

Soybean prices increased 1.4% to 71 cents per pound, the highest level since 2008. US canola futures are also on the verge of an all-time high, and palm oil in Malaysia hit a new record high of $1,434 per ton.

“Drought has crimped soybean crops across South America this season. Rival oilseeds like palm and canola have also suffered shortfalls from adverse weather and labor shortages. And escalating political tensions involving Ukraine and Russia pose a risk for sunflower oil exports, which the two countries dominate,” according to Bloomberg. 

Ivy Ng, the regional head of plantations research at CGS-CIMB Securities, said,

“for the supply side, everything that could go wrong, went wrong; problems “hit all the key producing countries, whether it’s palm oil or a competing oil. There’s no reprieve in the short term, and people are reacting to that.”

Earlier this month, Goldman Sachs’ Jeff Currie warned that shortages across commodities could send higher prices. He said markets are “incredibly tight from a physical perspective” … “we are out of everything, I don’t care if its oil, gas, coal, copper, aluminum, you name it we’re out of it.” – READ MORE