Negative pressure and slight decline in the Chinese palm oil market
Palm oil prices slipped in early February, down over 2% as weak domestic demand outweighed strong Malaysian export and production data. Despite supportive global cues, local futures and spot markets remain under pressure. Analysts expect continued softness post-holidays as demand eases and inventories stabilize.
In early February, the domestic palm oil market experienced price fluctuations and declines. On February 1, the average market price of palm oil was 9,196 yuan/tonne, while on February 6, it was 9,002 yuan/tonne, representing a decline of 2.11%.
In early February, external data for Malaysian palm oil was largely positive, with production declining and exports strong. Specifically, from January 1 to 31, palm oil production in South Malaysia decreased by 13.08% month-on-month, while Malaysian palm oil exports increased by 14.9% to 17.9% month-on-month. Overall, the Malaysian palm oil market’s performance in the external market is relatively strong. Due to weak domestic demand for palm oil, the stimulus from the overseas market is limited. The domestic palm oil futures market is at average levels, while the spot market is generally weak, down more than 2%.
SunSirs analysts specializing in palm oil believe that after the holidays, demand for oil will weaken, inventory pressure will ease, and the palm oil market will continue to operate in a weak state going forward.
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