Palm Oil Prices Surge 11.96% in East China! Market Turmoil Causes Price Fluctuations Up to ¥9,000/Ton

As of October 11, 2024, the reference price range of 24-degree palm oil at ports in East China was 8,990 to 9,000 yuan/ton, up 3.57% compared with last week and up 11.96% compared with last month. The average price this week was 8,983 yuan/ton, up 5.12 percent from the previous month. The national standard 24 degree palm oil reference price range is 9040 to 9090 yuan/ton. At the end of the trading day on October 9, the benchmark December 2024 crude palm oil futures contract in the Malaysian crude palm oil futures market was quoted at RM4,251 / tonne, up 1.31% from the previous week. In East China, the port basis of 24 degrees palm oil is 01+260 yuan/ton (negotiated transaction); The basis of the national standard 24 degree palm oil is 01+350 to 400 yuan/ton; The base difference of ordinary 24 degree palm oil in Shandong is 01+300 yuan/ton; The 24 degree palm oil base difference in South China is 01+180 to 200 yuan/ton, and the 18 degree palm oil base difference is 01+250 to 260 yuan/ton; The national standard 24 degree palm oil price in North China is 01+220 yuan/ton; The base price of port palm oil in the southwest region is 01+650 to 680 yuan/ton, and the base price of refined palm oil is 01+850 yuan/ton. The above price is for reference only, the actual transaction price will be adjusted according to the market situation.

During the National Day holiday, the geopolitical conflicts in the Middle East intensified, leading to a sharp rise in international crude oil prices, which in turn promoted the price of BMD crude palm oil main contract. After the festival, under the boost of the external market, the domestic oil market collectively rose, the rising momentum of palm oil prices was strong, and the futures price successfully broke through the integer mark of 9000 yuan. However, due to the weakening of concerns about the disruption of crude oil supply, international crude oil futures prices fell sharply, US soybean oil and Malaysian palm oil prices fell under pressure, domestic palm oil prices followed the decline, and the spot basis price increased slightly. At the same time, the general decline in commodity markets hit sentiment in the oils and fats market, with average spot volume.

According to the latest report released by the Malaysian Palm Oil Directorate General (MPOB), Malaysia's palm oil stocks at the end of September stood at 2.01 million tonnes, an increase of 6.93% from the end of August. Gross palm oil production in September was 1.82 million tonnes, down 3.8% from August. Palm oil exports in September were 1.54 million tons, an increase of 0.93% from August.

Due to the continuous inversion of import profits, domestic palm oil imports are small, coupled with the situation of ship washing in the far month, the inventory increase is limited. As of the 41st week of 2024, domestic palm oil stocks were about 507,800 tons. According to incomplete statistics of Baichuan Yingfu, as of the 40th week of 2024, the domestic spot palm oil trading volume was 500 tons, down 88.51% from the previous week. From September 26 to October 9, the volume of domestic 24-degree palm oil was 6,100 tonnes, down 7.01% from the same period last week. After the holiday replenishment mood is general, the overall trading atmosphere is relatively flat.

This week, the import cost of palm oil continued to run high, above 9300 yuan/ton. Import profits are still upside down. This week's real average import cost increased by 3.85% from the previous week, while the average import profit decreased by 6.91% from the previous week. As of October 10, the theoretical daily cost was about 9,473.24 yuan/ton, and the theoretical gross profit of palm oil was about -483.24 yuan/ton.

The number of new ships purchased for domestic palm oil is insufficient, and it is expected that the domestic inventory increase will be limited in the later stage, which provides a certain support to the price. The new Malaysian Palm Oil report shows a 6.93% increase in inventories at the end of September, a 3.8% decrease in production and a 0.93% increase in exports. Considering the impact of year-on-year production cuts in Indonesia and the increase in B40 biodiesel, the supply side has provided support to market prices in the short term. However, under the pressure of high prices, the downstream industry's demand for palm oil after the holiday is generally willing to replenish, and as the weather gradually turns cold and the pressure of the price difference of bean palm, domestic palm oil consumption is still in a weak state. The oil as a whole has entered the off-season of consumption, and the market driving force is not strong.

Overall, the accumulation rate of domestic palm oil is slow, and the supply side provides a certain support for the price. However, the overall inventory of grease series products is high, which limits the upward range of the basis. Weak domestic demand and light volume weighed on the performance of market prices. The impact of macro news is still there, supporting unilateral price volatility at high levels. It is expected that the palm oil market will fluctuate within the range next week, and the price fluctuation range of 24 degree palm oil at the port is expected to be between 8800 and 9000 yuan/ton, and the specific trend needs to be determined according to the origin data, the crude oil market, the market of other oil and grease products, and the domestic arrival volume and demand consumption data.