Cofeed News: till March 23rd this week, edible palm oil at China’s ports has increased from 649,100 tonnes to 679,100 tonnes by 4.6% in stocks on the week, and meantime, the figure is still 0.2% higher than 677,400 tonnes on a year-on-year basis with an increase of 1,700 tonnes; yet, stocks of industrial palm oil are down from 88,000 tonnes to 82,500 tonnes on the week, with a reduction of 5,500 tonnes by 6.2%. 

 

    Generally, price gap between soybean oil and palm oil domestically now settles at 560 yuan/tonne, a figure still lower than normal level of 800 yuan/tonne. Actually such small price difference subdues the demand for spots and poor performance of oil futures at home and abroad still stumbles buyers’ initiatives in buying. As a consequence, turnover of palm oil this week domestically is only around 7,400 tonnes as opposed to 19,600 tonnes last week, a steep decline in sales. According to Cofeed, China’s traders for the present have no interest in palm oil buying as palm oil is in a upside-down state amid accumulating stocks, otherwise, its stocks may be consumed and downsized if import margins in April remain unsatisfactory.

                              Figure: Comparison of domestic palm oil stocks in recent years

    Imports of palm oil are estimated to be around 0.35-0.38 Mln tonnes for March import (0.25 Mln tonnes of 24-degree palm oil, 0.10-0.13 Mln tonnes of industrial palm oil); about 0.31 Mln tonnes for April imports (0.18 Mln tonnes of 24-degree palm oil, 0.13 Mln tonnes of industrial palm oil) and 0.43 Mln tonnes for May imports (0.30 Mln tonnes of 24-degree palm oil, 0.13 Mln tonnes of industrial palm oil), all keep unchanged from estimates last week. Arrivals of palm oil may change with the market and shipping schedule, therefore information will be updated according to latest shipments and possible defaults.