On February 3, the spot price of vegetable oil sector plunged. The average price of soybean oil market is 6420 RMB / ton, which is 7.52% lower than that before the festival and 8.59% lower than that at the beginning of January.

The average price of palm oil market is 6167 RMB / ton, which is 4.82% lower than that before the festival and 7.09% lower than that at the beginning of January.

Products: During the Spring Festival holiday, the international vegetable oil price plunged. The price of palm oil in Mapan fell by more than 10%, and the price of soybean oil fell by more than 8%. The sharp decline of oil futures in the external market directly led to a sharp decline in the domestic oil futures.

On February 3, the decline of oil futures was about 400 RMB / ton. Futures market pressure. Meanwhile, the end industry of vegetable oil, that is the restaurant industry went into the winter. Vegetable oil spot prices rose weak. Spot prices rose with the plate. The main quotation of soybean oil market in Shandong Province is about 6400 RMB / ton, down 500 RMB / ton compared with that before the festival. The main quotation of palm oil in Guangdong Province is 6130 RMB / ton, down 300 RMB / ton compared with that before the festival.

Futures: The main y2005 contract of Lian soybean oil futures opened at 6040 RMB and closed at 6040 RMB, down 454 RMB. The main P2005 contract of palm oil futures opened at 5676 RMB and closed at 5676 RMB, down 426 RMB. The main oi2005 contract of Zheng Caiyou futures opened at 7064 RMB and closed at 7108 RMB, down 488 RMB.

End Customer: Affected by 2019-nCoV, multiple measurement was taken in the China’s New Year. Collective gatherings are prohibited. Holidays are extended. Schools and Colleges are postponed. Among them, the restaurant industry is severely damaged as the demand is unusually low as people are trapped at home by 2019-nCoV. Palm oil and soybean oil as frying oil are the most affected.

Meanwhile, to control the spread of 2019-nCoV, the time for many regions to return to work was legally postponed to February 10, which used to be February 1. Some of vegetable oil started up one by one if policy allows.

On the other hand, local government set the blockage to test passengers’ temperature and maximumly avoid cross-province spread. It is helpful for to control 2019-nCoV, but the blocked logistics and transportation makes the supply of raw materials tight. The supply of soybean oil and rapeseed oil reduced. And small and medium-sized dealers mainly digested the inventory.

At present, the inventory of soybean oil and rapeseed oil is at a low level. The inventory of soybean oil is about 850000 tons, down nearly 9% on a month on month basis. The inventory of rapeseed oil is about 270000 tons, down more than 8% on a month on month basis. In the short term, it is difficult to ease the tight situation of oil supply, which to some extent limits the falling space of oil.

Market Forecasting: Li Bing, an analyst of agricultural products in SunSirs, believes that the vegetable oil market tends to stabilize in the short term due to the impact of its own supply and demand. After the Lantern Festival (February 10), if the enterprises return to work better and the transportation improves, the vegetable oil market may have a small rebound. In the view of fundamental analysis, palm oil production reduction is still the leading factor. It is expected that the vegetable oil recovery will take a long time, and the real turning point will be at the end of May and the beginning of June.

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