1. Price Trend

The Palm Oil Commodity Index is 70.41 on November 27, a decrease of 0.81 points from yesterday. It is 37.62% lower than the highest point at 112.88 on April 10, 2012 in the cycle and is 36.61% higher than the lowest point at 51.54 on December 16, 2018 in the cycle (Note: The cycle refers to since March 1, 2012).

2. Market Analysis

According to data from SunSirs, since November, palm oil prices have experienced three rounds of roller coaster prices and the overall price has continued to rise significantly. At the beginning of the month, the average palm oil market price is 5,320 RMB/ton. At the end of the month, the average palm oil market price is 5,564 RMB/ton, and the price rises by 4.59%.

Strong demand at the beginning of the month brings palm oil into the first round of roller coast coaster prices.

In early November, demand for Malaysian palm oil exports is strong in October. Many agencies have predicted a significant increase in palm oil exports. Under the support of good news, Malaysian palm oil in the external disk rises sharply, rising nearly 3%. Domestic palm oil rose follows up. Palm oil is confronted with the first round of rising prices. The price of palm oil performs madly. On November 5, the main palm oil contract closed at 5,404 RMB/ton, with an increase at 156 RMB/ton. The mainstream offer is 5,500-5,600 RMB/ton, and the price has raised more than 200 RMB/ton, an increase at nearly 4%. On November 6, after the mad increase, the market returned to rationality, and palm oil prices have gradually been corrected. Up to November 8, the price of palm oil has a decrease at 1.14%.

Several reports bring good news and palm oil stages the second round of roller coast coaster prices.

In November, MPOB report and USDA report are released. Palm oil production and inventory have been significantly reduced. Production reduction has become a foregone conclusion, and exports have increased significantly. Customs data show that soybean imports have fallen sharply. Under the stimulus of good news, the price of palm oil rises for two days. Starting from November 11, the market became red, and palm oil and soybean oil futures prices are in a sharp rise. On November 12, palm oil closed at 5,524 RMB/ton, and prices rose by 90 RMB/ton. The average spot price of palm oil was 5,610 RMB/ton, an increase of 3.16% from last week and an increase of 5.45% from the beginning of November. Palm oil staged a second round of rally. On November 13, the favorable factors were digested by the market, and palm oil fell again. Till November 18, palm oil fell more than 3 points.

Biodiesel policy fuels palm oil staging in third round of roller coaster market.

According to Indonesian news on November 20, Indonesia's Ministry of Energy has approved the addition of 72,000 kiloliters of fatty acid methyl esters (referred to as FAME, using palm oil as raw materials) for the B30 comprehensive trial project. Indonesia plans to implement the B30 biodiesel blending project in 2020, which mandates the blending of 30% palm oil in diesel. The news is so positive that palm oil gets crazy and starts the third round of roller coaster prices. On November 20, palm oil rose by 4.54% from the beginning of the week. Then, the bio-diesel policy's favorable atmosphere gradually faded. Starting on November 25, palm oil continues to fall, falling by nearly 3 points.

Output: In October, Malaysian palm oil output was 1,795,880 tons, a year-on-year decrease of nearly 8%. The month-on-month decrease was significant, with Malaysia's palm oil production in September at 18,443,233 tons.

Inventory: At the end of October, Malaysia’s palm oil inventory was 2,348,066 tons, a decrease of 4.1% from the previous month. In September, Malaysia’s palm oil inventory was 2,448,272 tons. At the end of October last year, the inventory was 2,222,391 tons, a year-on-year decrease of 13.74%.

Shipping Agency Report

Export: Shipping survey company AmSpec Agri Malaysia LLC said that during the period of November 1-10, 2019, Malaysia’s palm oil exports were 414,020 tons, an increase of 12% over the same period in October.

Export: According to data released by the shipping survey agency ITS (Intertek Testing Services), Malaysia’s palm oil exports during November 1-10, 2019 were 412,040 tons, an increase of 19.7% from 344,330 tons in the same period in October.

3. Market Forecasting

Li Bing, an agricultural product analyst in SunSirs, believes that the big rise and fall of palm oil in November is mainly affected by the futures market. Biodiesel policies, bullish reports, and other multiple bullish factors have stimulated the price of palm oil. However, that news are not fully heavier, thereby the price is rushing back and forth. From a long-term perspective, there is still room for palm oil to rise.

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