August 11 news
According to Spotcom data: At the beginning of August, the palm oil market in China showed signs of recovery, with prices fluctuating upwards. On August 1, the average market price of palm oil was 9,234 CNY/ton, and by August 11, the average market price had risen to 9,422 CNY/ton, an increase of 2.04%.
The Main Factors Influencing Fluctuations in Palm Oil Prices
Supply Side: In July, Malaysia’s palm oil production entered its seasonal peak period, with monthly output rising by 7.4% to 7.5% month-on-month. Market estimates indicate that Malaysia’s palm oil inventories at the end of July will climb to 2.61 million tons, reaching their highest level in nearly four months, indicating relatively high inventory pressure in the short term.
Exports: In July, Malaysia’s palm oil exports rose by about 21% month-on-month; early August export data also showed a positive trend, helping to deplete inventories and easing the pressure of inventory accumulation.
China: In the week of August 7, the commercial inventory of palm oil in key regions nationwide was around 860,000 tons, an increase of more than 30,000 tons from the previous week, with a growth rate exceeding 4%.
Demand Side: Currently, we are in the traditional off-season for oils and fats. Restaurants and food manufacturers continue to maintain rigid demand procurement, but their willingness to stock up is lukewarm. High inventory levels in China are suppressing the room for spot prices to rise. Soybean oil prices remain relatively low, leading to extensive substitution for palm oil and squeezing palm oil consumption for edible purposes. The widening price gap between soybean and palm oil is further restraining demand for palm oil.
Technical Level Forecast
Palm Oil Spotcom Analysis: From the price trend chart of palm oil, key indicators: On July 13, the 10-day moving average of palm oil crossed above the 20-day moving average, indicating a rise in the market. On August 5, the 10-day moving average fell below the 20-day moving average, with the difference between the averages narrowing in reverse, leading to a deceleration in the decline. In early August, the spot market for palm oil showed mixed performance with oscillating increases. It is expected that the upward trend will continue in late August.
Auxiliary Indicator: In early August, palm oil prices reached their 10-day high, a mid-to-high level by the 20th, and a mid-to-high level again by the 30th, indicating that, in the long term, palm oil prices still have the potential to decline.
To sum up: In late August, China's palm oil fundamentals remained predominantly bearish, with ongoing supply pressures and weak demand, leading to volatile market conditions.
From a technical perspective, it can be seen that in early August, the palm oil market in China was at a mid-high level, with room for further decline. In late August, the overall upward trend of the palm oil market in China slowed down, with the market mainly characterized by fluctuations. It is expected that prices will range between 9200 CNY/ton and 9500 CNY/ton.
