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SunSirs: Agriculture, Palm Oil Continues to Rise

January 14 2020 13:35:20     SunSirs (Daisy)

The palm oil commodity index on January 13 was 86.10, an increase of 1.29 points from yesterday, and a decrease of 23.72% from the highest point of the cycle at 112.88 points (2012-April-10), an increase of 51.54 points from the December 16, 2018 minimum 67.05%. (Note: Period refers to 2012-March-01 to present)

Since January, the palm oil market is still at a high level and in a strong position. On January 10, the Malaysian MPOB report was released. The report was rather bullish and the palm oil market continued to develop. Up to January 13, the average palm oil market price was 6804 RMB / ton, which were a 3.69% increase from that in early January and a 21.89% increase from that in early December. After New Year's Day, palm oil is still a strong player in agricultural products.

Palm oil aspect, after New Year's Day, Malaysia’s palm oil production in the main producing country is expected to decrease significantly. Coupled with the rigid demand for terminal oils, palm oil is still in a rising trend. On January 10, the MPOB report was released. It announced that in December, Malaysia’s palm oil production decreased by more than 13% month-on-month basis. And the news came back with more bullish factors.

Palm oil rose on the 13th in the morning. On the 13th, the palm oil p2005 contract ended at 9:00 and opened at 6466 RMB / ton, the latest 6,450 RMB / ton, up 46 RMB / ton. The futures market boosted and the spot price of palm oil rose one after it. The mainstream offer was 6750-6800 RMB / ton, with a single-day increase of nearly 2%.

Data: According to the data released by the Malaysian Palm Oil Board (MPOB), Malaysia ’s palm oil production in December 2019 fell 13.27% month-on-month to 1.334 million tons (expected 1.32 million tons, 1.538 million tons last month, and 1.808 million tons in the same period last year).

Imports increased 64.73% month-on-month basis to 123,000 tons (expected 7.5-8, 7.5 last month, and 10.86 in the same period last year)

Exports decreased 0.67% month-on-month basis to 1.396 million tons (expected 132, 140 in last month, 138 in the same period last year);

Inventory decreased on month-on-month basis by 11% to 2.007 million tons (expected 205-207, 225.6 last month, 300.7 in the same period last year).

Market Forecasting aspect, Li Bing, an agricultural product analyst at SunSirs, believes that the reduction of palm oil output in Malaysia is a foregone conclusion, and supply is becoming tighter. Dominant palm oil prices are likely to rise and fall in the short term. After the Spring Festival, oil consumption has weakened. The surge is insufficient.

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