I. National stocks

Edible palm oil stocks in China modestly descend this week. In the week ending Feb 26, edible palm oil stocks in China total 673,700 tonnes at nationwide ports, down 0.1% from 674,500 tonnes last week; up 68,800 tonnes or 11.37% from 604,900 tonnes in the previous month; down 252,600 tonnes or 27.27% from 926,300 tonnes in the corresponding period last year. In the same period in former years, palm oil inventories were 776,800 tonnes in 2019, 672,900 tonnes in 2018 and 573,800 tonnes in 2017. On an average from 2016-2020, palm oil stocks reached 724,700 tonnes. Additionally, industrial palm oil stock at domestic ports amounts to 112,100 tonnes, a fall of 11,200 tonnes or 9.08% versus 123,300 tonnes in the previous week.

The price spread of palm oil with soybean oil has expanded this week, setting at 1,555 CNY/tonne as of this Friday, an increase of 120 CNY/tonne from 1,435 CNY/tonne a week earlier. Both palm oil spot and futures are in positive territory at home and abroad, and buyers are still active in making purchases. The trading volume totals 63,750 tonnes, by comparison to 21,200 tonne in the previous week, a growth of 200.7%. And palm oil imports in February have dropped. Accordingly, these have led palm oil stocks to dwindle. Due to less imports in March amid unfavorable import margins, palm oil stockpiles will likely continue falling.

II. Goods Arrivals

China’s palm oil imports in March are expected to be 350,000-400,000 tonnes (RBD palm olein 200,000-250,000 tonnes and industrial palm oil 150,000 tonnes), basically unchanged from the estimate in the previous week.

III. Margins and Shipments