China’s soybean oil prices remain under pressure from high stocks and weak demand

Soybean oil prices in China fluctuated significantly throughout October 2026 but remained relatively stable overall due to high inventories and weak domestic demand. According to market analysis agency SunSirs, the average soybean oil price stood at 8,996 yuan/t at the beginning of the month and increased to 9,050 yuan/t by October 28, up 0.6%. Despite the slight increase, the market remains under pressure from ample supplies, limiting the potential for a sustained price recovery.

One of the main bearish factors is the ample availability of soybeans at Chinese crushing plants. Following substantial soybean imports in September, oilseed processors continued to hold high raw material inventories. Although crushing activity temporarily declined during China’s National Day holiday, plants quickly resumed production, maintaining substantial soybean oil supplies. Throughout October, commercial soybean oil inventories stood at 1.45–1.50 mln tons, historically high levels for this time of year. Large stocks continue to weigh on spot prices and encourage traders to sell accumulated inventories more actively.

Meanwhile, domestic demand for soybean oil remains weak following the completion of purchases ahead of the autumn holidays. Food processors and food service companies have shifted to purchasing smaller volumes based on immediate needs, limiting market activity. Additional competition comes from palm oil, which processors can use as a cheaper alternative. High palm oil inventories in Malaysia and a seasonal increase in production across Southeast Asia are also limiting price gains in China’s vegetable oil market.

External factors could provide some support to the Chinese market, including changes in US soybean prices, developments in the crude oil market and US biodiesel policies. However, the ongoing US soybean harvest and expectations of strong production are likely to maintain downward pressure on prices. Short-term price increases could occur if China steps up purchases of US soybeans, adverse weather delays harvesting or drought affects crops in South America. Nevertheless, analysts believe these factors are unlikely to significantly alter the overall supply-demand balance.

According to SunSirs, China’s soybean oil market is expected to remain under pressure from high inventories and limited demand in November. Analysts forecast continued price fluctuations, mainly within the range of 8,800–9,000 yuan/t, although external developments could trigger short-term price spikes. However, substantial production volumes, weak purchasing activity and competition from palm oil are expected to limit any significant price increases. A stronger price recovery would require a reduction in inventories and an improvement in domestic consumption.

Tags: China, soybean oil