Demand in the biodiesel industry remains key to the price of palm oil

Since the beginning of this year, palm oil futures have shown a significant bullish trend, with an increase of about 32% during the year. Since August, the palm oil futures price has continued to rise after breaking through the previous consolidation range. As of yesterday's close, palm oil's main contract of 1705 was reported at 6,428 yuan/ton, a new high for the year and an increase of 2.19%.

Not only palm oil, but recently in the international oil market "warm air", soybean oil, vegetable oil and other oil futures prices were all boosted. The oil production reduction agreement pushed up the price of crude oil and stabilized the price of 50 US dollars per barrel. The price of biodiesel was supported. In particular, the correlation between palm oil and crude oil has increased significantly since the beginning of last year, as the top palm oil producer Indonesia will subsidize biodiesel. Significantly tripled.

From the perspective of long-term consumption, industry insiders said that the demand for biodiesel industry is still the key to the trend of palm oil prices, considering the decline in import demand from major importing countries.

From the perspective of the international market, China and India are major demanders and importers of palm oil. At noon on December 14, the Malaysian Palm Oil Board released official palm oil production stocks for November. From the relevant data, a brief look at the recent supply and demand of palm oil: Malay palm oil production in November was 1.57 million tons, down 6.1% from the 1.68 million tons in October, lower than the market estimate of 1.63 million tons; November Malay Palm oil exports 1.37 million tons, down 4.2% from the previous month's 1.43 million tons, higher than the market estimate of 1.29 million tons; finally, at the end of November, Malay palm oil stocks increased by 5.2% from the previous month to 1.656 million tons, slightly lower than before The market estimates 1.69 million tons. The overall report is more neutral. On the export side, Malaysia's palm oil exports continued to decline in November, mainly due to the decrease in imports from India and the EU, with India decreasing by 72,500 tons and EU by 63,600 tons. However, China's imports increased by 30,500 tons, Malaysian brown in November. Oil exports are generally better than market expectations.

In China, the research team of Meierya (600107) Futures Agricultural Products (000061) believes that in November and early December, China’s palm oil import profits opened, and buyers’ bookings increased, making Malaysia’s palm oil exports to China in November. Increased; however, in mid-December, South China and North China once again saw import inversions, inhibiting buyers' enthusiasm for boating.

As of December 14, China's palm oil port inventory of 293,500 tons, an increase of 44,000 tons compared with the same period last month, but still far lower than the same period of the previous year; coupled with the domestic temporary storage vegetable oil auction continues to be hot and soybean oil stocks decreased, since late November domestic The spot price of palm oil rose again.

According to the Melya Futures Research, in general, the production of Malaysian palm oil in the last month of this year will continue to be lower than expected. The estimated value is between 1.6 million tons and 1.7 million tons. The low stock support Malaysian palm oil continues to be high. Operation, the support position moved up to 2950 points - 3000 points. The low oil stocks of palm oil and the good auction of the vegetable oil at the end of the store are supported. The three major domestic oils including palm oil will continue to operate at a high level.

VSA Capital, a London-based investment bank, said that the low palm oil stocks in China and the continued El Niño phenomenon in 2015/2016 will support palm oil prices next year.

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