The price of palm oil fell by 6% in two months： the inventory decreased, the output increased and the export volume increased greatly, but the market expectation was digested.

[Palm oil prices have continued to fall in the past two months] Recently, changes in palm oil prices have aroused widespread concern in the market. Under the double influence of tight supply and strong export, the price of palm oil was once ahead of other oils and fats. However, since the beginning of April, the main contract price of palm oil futures has fallen by nearly 6%. According to the latest data released by Malaysian Palm Oil Bureau, at the end of March, Malaysia’s palm oil inventory decreased by 10.68% compared with February, the output increased by 10.57%, and the export volume increased by 28.61%, both of which reached the highest point in the past 10 months. Despite this, the market price did not rise as expected, but fell, reflecting that the market’s expectation of low inventory has been fully digested. Domestic spot price of palm oil has dropped by 200~290 yuan/ton compared with a week ago. At present, the price difference between palm oil and other competing oils is in an unreasonable range, which leads to a substantial increase in the demand for palm oil replacement. The terminal has replaced palm oil with soybean oil and rapeseed oil in large quantities, and the import of palm oil by some enterprises has also been greatly reduced. In the international market, India, as the world’s largest importer of vegetable oil, imported 485,000 tons of palm oil, 219,000 tons of soybean oil and 446,000 tons of sunflower oil in March, with a chain change of -2.5%, 26% and 50% respectively. With the increase of international palm oil price, sunflower oil is gradually eroding the market share of palm oil. From the supply side, palm oil has entered the seasonal increase cycle, the harvest of soybeans in South America is also accelerating, and the global oil seed supply is relatively sufficient. howeverThe potential risk lies in the launch of American beans and the geopolitical crisis in the Middle East, which may have a great impact on the vegetable oil market. Although it is necessary to adjust the price of oil after the surge, under many uncertain factors, its downward space may be limited. Domestic oil inventory has been declining for several months, but with the increase of soybean oil inventory and the low level of rapeseed oil inventory, it is expected that the speed of oil destocking will slow down.