Chelmer Foods Seed Market outlook 06.05.2022
On Thursday the 5th of May it was announced that interest rates will increase from 0.75% up to 1%, the highest level since the 2009 crash, and the fourth consecutive increase since December.
Inflation is at a 30-year high and is predicted to breach 10% by the end of the year with fuel, energy and food costs soaring partly due to the Ukraine war. The expectation is that inflation will hit 9% in the coming months (up from its previous forecast of 8%) and to reach 10.25% by the end of the year.
The British Retail Consortium reported that food inflation accelerated to 3.5% in April, up from 3.3% in March. This is above the 12- and 6-month average price growth rates of 1.3% and 2.6%, respectively. This is the highest inflation rate since March 2013.
Brown Linseed prices have eased in reaction to cheaper transport options for Belgium processors. As vessels and vehicles can only provide limited supply into Europe and the UK, this has taken the pressure off availability and therefore bringing down transport prices. However, Golden Linseed prices are on the rise due to the ban on Russian and Belarusian trucks entering the EU without the correct license in place.
As the conflict continues, farmers press on in the Ukraine and Russia to the best of their ability. It is difficult to get a clear view on how much of Ukraine’s crop has been sown successfully so far. Undoubtedly the war is affecting machinery, fuel, and transport. Bulgaria have reportedly planted 90% of their own sunflower seeds. In the market as a whole, the Indonesian ban on palm oil exports has had an inevitable impact on price levels, this is in addition to some already existing problems to oil alternatives such as Soy and Rapeseed with droughts in Argentina, Brazil, and Canada.
Recent European Commission data shows that shipments to the EU slumped by 13% in 2021. The Ukraine could be major factor in this year’s global supply and dictate market price levels. Looking to the U.S. the market seems stable with freight being the main concern, continuing to climb. Offers are trickling through, although mainly for short term contracts or prompt shipments.
The market remains firm at the current levels. Czech origin offers remain limited carrying with it a high price. Hungarian crop conditions are poor and is said to be worse than last year, it is reported that an estimated 60% of the poppy fields will be discarded, and believe its yield will be sufficient to support domestic demand only. Having said that, most other origins continue at stable levels.