According to the Commodity Market Analysis System of SunSirs, the palm oil market has been on an upward trend since August, with continuous upward movements. As of December 2nd, palm oil has risen by over 32%. On August 1st, the average market price of palm oil was 7,854 RMB/ton, and on December 2nd, the average market price of palm oil was 10,370 RMB/ton, with a price increase of 32.03%.
Malay palm oil supply is tightening, inventory is low, and the bullish trend is dominant. Domestic palm oil continues to rise. Let's take a look at the main factors affecting the sharp rise in the palm oil market this round? Can palm oil reach new highs in December? Let's wait and see.
Supply side: Starting from August, the import volume of palm oil in China has gradually decreased. In September, the import volume of palm oil was only 220,000 tons. In October, there was a slight increase in palm oil. Starting from November, Malaysian palm oil entered a production reduction cycle, and the import volume of palm oil in China continued to decline. Due to the continuous decline in import volume, domestic palm oil supply is tightening, supporting the upward trend of the market.
Futures: Since August, Malaysian palm oil production is expected to increase, with a month on month increase of 2.87%. The overseas palm oil futures market has been suppressed, while the domestic palm oil spot market has fluctuated with small increases. Starting from September, there have been signs of a reduction in Malay palm oil production, with an estimated decrease of 3.02% in September output. The production in October increased by 0.6%, and the estimated production from November 1st to 20th decreased by 5.19%. The overseas palm oil futures market was boosted from September to November, while the domestic palm oil futures market followed suit and the spot market was supported, with prices continuously rising.
Demand side: August is currently experiencing high temperatures, and palm oil terminal demand has entered the off-season. The overall demand has declined, and the spot market is mainly experiencing narrow fluctuations. Starting from September, universities will gradually reopen, and the demand for concentrated consumption of palm oil will increase. Coupled with the Double Festival effect of Mid Autumn Festival and National Day, the stocking volume of terminal enterprises will increase. In November, the weather will cool down, and palm oil will enter the peak demand season. Supported by demand, the palm oil market showed impressive performance from September to November.
The agricultural product analyst of SunSirs believes that as we enter December, the main producing country of Malaysian palm oil is still in a production reduction cycle, and the bullish factors in futures are still present. Terminal demand is in the peak consumption season, and palm oil will continue to fluctuate and rise in the future, with prices remaining high and expected to reach new highs.
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