The U.S. Food and Drug Administration’s (FDA) plan to phase out the use of trans-fat in processed foods may lead demand for soyoil into a major decline in the next few years, opening the doors for other edible oil markets.
Thursday’s FDA announcement “was really a surprise,” Dave Lehman, managing director of commodity research and product development for the CME Group in Chicago, said Thursday at the Cereals North America global grain conference in Winnipeg.
“I saw that bean oil (on the Chicago Board of Trade) was down 40 points (yesterday).”
A selloff of CBOT soyoil continued through Friday, as prices were down over 40 points at mid-morning.
If the plan does go into effect, other oil markets such as canola, palm and rapeseed could see increased demand with them possibly serving as replacements for soyoil.
Lehman said the announcement should have “rapeseed and canola folks feeling pretty good.”
The timing was good for Nicholas Kennedy of NYSE Liffe, who made a big announcement regarding a new contract.
“We’re launching as soon as next year a rapeseed oil and meal contract,” he said. “That will be sometime in 2014.”
The FDA did not announce a timeline for its plan to phase out trans-fats from processed foods.
— Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
U.S. FDA moves to ban trans fats, citing health risks, Nov. 8, 2013