In Malaysia, palm oil prices fell 3.5% amid rising inventories and reduced supplies to India

RBD Palm Oil

Malaysia

Published Jan 27, 2023

Tridge summary

On the first day of trading after the long New Year's weekend in Malaysia, palm oil prices fell sharply, as expected, on data about reduced exports from Malaysia and Indonesia and higher inventories in India. April palm oil futures on Bursa Malaysia tumbled 3.6% to 3,753 ringgit/t or $881/t yesterday, the biggest intraday drop in 6 weeks. During January 1-20, compared to the same period in December, Malaysia reduced its export of palm oil by 38.5%, and Indonesia reduced its export by 8.5% in 2022. In India, stocks of vegetable oils at the beginning of January reached a record 3.2 million tons compared to 1.7 million tons a year ago. As a result, palm oil imports may decline from 3.1 million tons in Q4 2022 to 2.2 million tons in Q1 2023. Large inventories and low demand are forcing refiners to cut purchases and focus on production.

Original content

The reduction in supplies to India will not be offset by increased imports to China, which has stepped up soybean purchases at the end of the year and will have a large supply of oil, adding pressure to vegetable oil prices. March soybean oil futures on the Chicago Stock Exchange fell 0.8% to $1,332/t yesterday (-6% for the week) on news of improved weather in Argentina. According to the Trading Economics platform, the prices of sunflower oil for delivery to buyers fell to $1,160/t CIF, but they are supported by a reduction in offers from Ukraine and the Russian Federation in the current season. Therefore, if under the pressure of low palm oil prices and a record soybean harvest in Brazil, soybean oil quotes will fall further, then sunflower oil prices will return to the previous "status" of premium oil compared to soybean oil, especially in view of the reduction in production and the sharp rise in prices olive oil. The increase in sunflower oil prices limited the growth of oil ...

Source: Graintrade