The story in Greek mythology where the water nymph Clytie was turned into a flower. This after watching nine days to Apollo the sun god on a rock without food and water inspires many. These flowers became known as the sunflowers. I did find the story online at forgotten tales and it reminded me that it is now sunflower time. On many places in our area I see large sunflower fields. From Sunflower seeds a vegetable oil can be extracted which is a pretty remarkable commodity.
Vegetable oil is extracted from a plant and in this case from sunflowers. The history of the sunflowers is an interesting one. The flower is native to North America where they have been cultivated for thousands of years. The plant was taken by Spanish explores to Europe around the 1500’s and in the early 1700’s. People managed to squeeze out the oil of the seeds. The Sunflower became really popular in that century, because of Peter the Great. By the early 1900’s many fields could be found in Russia where they were grown for vegetable oil production. By the late 1900’s sunflowers popularity found its way back to North America.
Types of vegetable oil
Sunflower oil has the highest Vitamine E content compared to all other vegetable oils. There are many vegetable oils among them there is palm oil, soybean oil, rapeseed oil, peanut oil, cottonseed oil and olive oil. This small list together with sunflower oil accounts for more than 95% of the world consumption. Next to these there are many specials such as sesame oil or linseed oil. A specific one should be mentioned, which is Canola oil, cultivated in the 1970 in Canada based on rape seed. Canola means actually Canadian Oil Low Acid.
Vegetable oil as a traded commodity
Is vegetable oil or oilseeds a commodity? It definitely is although vegetable oil is rather specific because it has many types. For some there is a derivative market such as for palm oil on the Bursa Malaysia Derivatives Berhad Exchange. When we look at soybean oil, there is a proper liquid derivate market on the Chicago Mercantile Exchange. In vegetable oil there is in many cases the possibility of substitution. When you would produce mayonnaise you would have many choices of what type of oil to use.
As there are liquid derivative markets for some types of oilseeds / vegetable oil and there is a high correlation in price movement. Cross hedging is a proper instrument for vegetable oil to reduce market risk exposure. Such portfolio can be managed in a commodity trade and risk management (CTRM) system such as Agiblocks. Despite the oil I am a fan of the sunflower. We just have put a nice bouquet of them at the reception of the Agiboo office.