China’s soybean and palm oil stocks rise, pressuring prices

Commercial stocks of major vegetable oils in China continue to increase, adding pressure to the domestic market. As of September 11, soybean oil inventories stood at 1.33 mln tons, palm oil at 920 thsd tons and rapeseed oil at 430 thsd tons.

Soybean oil stocks rose by 30 thsd tons w/w, 80 thsd tons m/m and 70 thsd tons y/y. The ample supply is already weighing on prices, with the benchmark soybean oil contract on the Dalian Commodity Exchange falling to 8,927 yuan/t on September 15, down 64 yuan on the day.

The most notable buildup has been in palm oil. Inventories reached 920 thsd tons, up 270 thsd tons from a year earlier, creating significant bearish pressure on spot prices.

Rapeseed oil stocks also increased in the short term, rising by 20 thsd tons w/w and 50 thsd tons m/m. However, they remain 180 thsd tons below last year’s level, providing some support to prices and limiting further downside.

As a result, China’s vegetable oil market enters the second half of September with ample soybean and palm oil supplies, while the rapeseed oil balance remains relatively tighter.

Tags: China, soybean oil, palm oil, Oilseed stocks