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PEANUT OIL prices are declining because this year's harvest has increased supplies. Prices climbed to a high of 42 cents per pound as stocks from the previous crop shrank while demand remained steady. But about three weeks ago, the US government decided to issue additional peanuts under the Commodity Credit Corporation loan program, causing prices to slide.
"We have about 200,000 [metric] tons of stock in the [CCC] loan, compliments of shellers who did not buy domestic peanuts this year because they still had inventory left over from last year, which is now being put into the market for crush," says a trader.
The additional peanuts caused oil prices to plummet to 33 to 34 cents per pound between late October and early December. Prices have recently recovered slightly, but analysts consider this merely a price adjustment following the drop.
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