Agri Picks Report July 08, 2024: Geojit Financial Services

commodities

Geojit Financial Services's report on Daily Agri Picks

The UN Food and Agriculture Organization's food price index was steady on month at 120.6 points in June as the increase in price indices for vegetable oils, sugar, and dairy products balanced out a decrease in the price index for cereals, while the meat index was almost unchanged. Though the food price index registered a third consecutive monthly uptick, it was 2.1% lower than a year ago and 24.8% below the peak of 160.3 points reached in March 2022, FAO said in a report. The cereal price index averaged 115.2 points in June, down 3% on month and 9% from its June 2023 value, owing to a decline in wheat prices caused by the seasonal pressure from the ongoing harvest in the Northern Hemisphere. Slightly improved production prospects in some exporting countries, including Kazakhstan and Ukraine, along with the implementation of a temporary import ban by Turkey, contributed to the softer price tone, according to the report. The vegetable oil price index rose 3.1% on month to 131.8 points in June, marking the highest level since Mar 2023. The increase was driven by higher quotations across palm, soy, and sunflower oils, while rapeseed oil prices remained virtually unchanged. After declining for two consecutive months, international palm oil prices rebounded in June, mainly underpinned by a reviving global import demand due to increased price competitiveness. Meanwhile, global soy and sunflower oil prices continued to rise driven by firm demand from the biofuel sector in the Americas and declining export availability in the Black Sea region, according to the report. With regard to rapeseed oil, international prices remained stable in June, but were higher on year due to the tightening global supply outlook in the 2024-25 season. The sugar price index rose 1.9% on month to 119.4 points in June, after three consecutive monthly decreases. But prices are still down 21.6% from June last year. The increase in June was driven by a lower-than-expected harvest in Brazil in May, which heightened concerns about the impact of prolonged dry weather conditions on sugar production in the coming months, the report said. Erratic monsoon rainfall in India, coupled with a downward revision in crop yield forecasts in the European Union, also contributed to the overall upward pressure on world sugar prices, but it was partly offset by the weakening of the Brazilian real against the US dollar, according to FAO.

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