I. National stocks

Palm oil stocks in China recover this week. In the week ending Jan 22, edible palm oil stocks in China total 614,200 tonnes at nationwide ports, up 1.2% from 607,000 tonnes a week earlier; up 35,100 tonnes or 6.1% from 579,100 tonnes in the previous month; down 215,800 tonnes or 26% from 830,000 tonnes in the corresponding period last year. In the same period in former years, palm oil inventories were 612,800 tonnes in 2019, 659,500 tonnes in 2018 and 485,700 tonnes in 2017. On an average from 2016-2020, palm oil stocks reached 640,400 tonnes. Additionally, industrial palm oil stock at domestic ports amounts to 127,300 tonnes, a contraction of 11,300 tonnes or 8.1% versus 138,600 tonnes in the previous week.

Market expects the imports of RBD palm olein to be around 450,000 tonnes in January. Due to the second wave of COVID-19, local governments call on people to have the Spring Festival in-place and try not to return to their hometown. With the family gathering being less frequent, market participants are afraid that the demand for edible oils will slacken. It is projected that palm oil stocks still carry the potential to marginally pick up afterwards.

II. Goods Arrivals

China is projected to bring in 580,000-600,000 tonnes of palm oil (RBD palm olein 430,000-450,000 tonnes and industrial palm oil 150,000 tonnes) in January, according to the latest statistics by Cofeed. And palm oil imports in February are expected to be 400,000 tonnes (RBD palm olein 250,000 tonnes and industrial palm oil 150,000 tonnes). Both are flat from the estimate last week.

III. Margins and Shipments