October 19th, according to news,
According to Spotcom data: After the National Day holiday, the palm oil market in China fluctuated and rose. On October 1, the average market price of palm oil was 9,250 CNY/ton, and on October 19, the average market price of palm oil was 9,290 CNY/ton, with the price increasing by 0.43%.
Main Reasons for the Fluctuations in Palm Oil Prices in China
Supply side
Overseas: SPPOMA: Malaysian palm oil production fell 5.97% month-on-month, with both yield per hectare and oil extraction rate declining in tandem. The expansion phase of the production cycle is weakening at the margin, signaling an early inflection point in output.
Shipping agency ITS/AmSpec: During the first ten days of October, exports surged 33.5%–37.7% month-on-month, and in the first half of the month, the overall month-on-month growth rate climbed further to over 43%. Pre‑festival inventory restocking in India was the key driver, significantly easing inventory‑buildup pressures at origin and serving as the most direct catalyst for this round of rebound.
Indonesia’s B50 biodiesel policy continues to be implemented, diverting Chinese biodiesel consumption toward export supplies. Coupled with drought and forest fires in Kalimantan, the market remains priced on expectations of reduced production due to the 2027 El Niño, providing key support for longer-dated contracts while exerting only limited upward pressure on near-term spot prices. Indonesia remains the world’s largest supplier, and ongoing competitive export pricing continues to weigh on the palm oil premium.
China: Port palm oil inventory is around 1.16 million tons, a significant increase year-over-year, with prominent inventory pressure; a large number of shipments are expected to arrive in October, and subsequent arrivals are also anticipated to be high, putting significant holding pressure on traders, and the spot basis continues to trade at a discount to futures. China's food demand is flat, with holiday stockpiling over, and downstream buyers are not actively replenishing stocks; the pace of soybean-palm oil price spread recovery is moderate, and the substitution competition between soybean oil and rapeseed oil continues, leaving China's demand without a breakout point.
Costs and External Variables
Crude oil: When crude oil is strong, the profit of palm oil biodiesel increases, providing valuation support to the oil and fat sector; fluctuations in crude oil are amplifiers of short-term market sentiment.
Macroeconomics and Exchange Rates: Fluctuations in the U.S. dollar and Malaysian ringgit exchange rates, coupled with the synchronized movements of U.S. soybeans and CBOT soybean oil, have resulted in a pronounced co‑movement—both up and down—across the oils and fats sector.
Technical Level Forecast
Palm Oil Spot Pass Analysis: From the price trend chart of palm oil, key indicators show that on October 14th, the 10-day moving average of palm oil crossed above the 20-day moving average, leading to a rise in the market. The difference between the averages is narrowing positively, indicating a deceleration in the decline. In the first half of October, the spot market for palm oil in China experienced a mix of rises and falls, with an overall oscillating upward trend. It is expected that in the second half of October, the oscillating upward trend will continue.
Main Reasons for the Fluctuations in Palm Oil Prices in China
In summary: In late October, the fundamental situation for palm oil in China remains bearish, with supply pressure still present, weak demand, and fluctuating market conditions.
From a technical perspective: In early October, the decline in palm oil prices in China slowed down. In the second half of October, the palm oil market in China is expected to be mainly volatile, with prices forecasted to range between 9,000 CNY/ton and 9,400 CNY/ton.
