China’s palm oil market grows steadily in January

The palm oil market recovered in January, growing by more than 5%. At the beginning of the month, the average market price of palm oil was 8,564 yuan/tonne. On January 26, the average market price of palm oil fell to 9,000 yuan/tonne, an increase of 5.09%.

The main factors influencing the palm oil market in January are as follows:

Supply side: Malaysian palm oil production is estimated to decline by 14.43% from January 1 to 20. Palm oil exports from January 1 to 25 totaled 1,099,033 tonnes, an increase of 7.97% compared to exports of 1,017,897 tonnes during the same period last month. Malaysia, a major producing region, is currently in a production contraction cycle: January saw a decline in palm oil production compared to the previous month, while export figures were rising, which is generally positive and supports palm oil prices.

Futures: Thanks to support for the Malaysian palm oil market in the overseas market, the domestic palm oil futures market has gained momentum. On January 26, the main palm oil contract closed at 9,092 yuan/tonne, up 176 yuan/tonne, or 7.11% from early January. The futures market is rising, as is the domestic palm oil spot market.

Demand: As the Spring Festival approaches, the palm oil warehouse market has become more active, and traders’ enthusiasm for buying remains unchanged. Robust demand has increased, and the palm oil market is seeing increasing sales volumes and a recovery in transaction volumes. Fueling demand, the domestic spot palm oil market is steadily growing.

SunSirs analysts specializing in palm oil believe that after the Spring Festival, robust terminal demand will wane, and all favorable factors will be exhausted. The sustained upward trend in the palm oil market will not be sufficient going forward, and this could lead to a minor decline.

Tags: palm oil, China