China soybean oil prices weaken on high stocks and softer demand

Soybean oil prices in China fell by 2.39% in September. According to SunSirs, the average market price declined from RMB 9,216/t at the beginning of the month to RMB 8,996/t as of September 30.

High supply remains the main source of pressure. Soybean arrivals stayed strong in September, while weekly crushing at oil plants reached 2.15–2.25 mln tons, supporting high soybean oil output.

Commercial soybean oil stocks were estimated at 1.49–1.51 mln tons at the end of September, slightly above last year’s level and among the highest seen this year. Higher exports helped absorb some of the surplus, but were not enough to significantly reduce inventories.

Demand during the traditional autumn peak season was weaker than expected. Ahead of the Mid-Autumn Festival and National Day holidays, food processors and traders mainly bought for immediate needs and avoided building large stocks at high prices. Competition from palm oil added further pressure.

SunSirs expects vegetable oil demand to weaken further after the holiday period while supply remains ample. Analysts forecast China’s soybean oil prices to remain in a range of RMB 8,800–9,000/t in the near term.

Tags: China, soybean oil