In 2022, the palm oil market will show a roller coaster trend. In the first five months, the price will go up all the way, with an increase of nearly 64%. In the next seven months, the market will jump from high to low, with an overall decline of 48.15%. At the beginning of the year, the average price of palm oil market was 9,560 RMB/ton. On December 12, the average price of palm oil market was 7,584 RMB/ton, with an overall decline of 20.67%.
The first stage: from January to May, the market fluctuated and rose, surging all the way up, with the highest price reaching 16,100 RMB/ton, a record high. After the New Year's Day, the price of palm oil started to rise, rising to March 3, the highest point was 14,380 RMB/ton, and the price rose by 50.42%. Since March 4, the market of palm oil has declined by 11.63%. After the Tomb Sweeping Day, palm oil once again rose sharply, rising 25.29% until the end of April. Palm oil fell 2.73% overall in May.
The second stage: from June to December, since June, the palm oil market has started a high dive, and the price has been falling continuously, from 15,760 RMB/ton to October 9, with a 52.25% drop. Since October 10, the palm oil market has been mixed, ranging from 7,584-8,600 RMB/ton to December 12, with the price falling 4.6%.
Supply side: In the first quarter, Malaysian palm oil was in the period of production reduction, with low output. After April, Malaysia's palm oil production increased steadily,. In the second half of the year, the temperature increased, and the palm oil production in Malaysia, the main production area, entered a production increase cycle, and the output continued to increase. In October, Malaysia's palm oil output reached 1.814 million tons, increasing for five consecutive months, with a month on month increase of 2.44%; 17.4% higher than that in June; Compared with January, the output has increased by more than 44%. Malaysia's palm oil production in November decreased by 6.09% compared with October.
Inventory: The global demand for oil and grease is sluggish, and the industry is sluggish. In the first half of the year, the growth rate of palm oil inventory was relatively slow, while in the second half of the year, palm oil inventory continued to rise. In October, Malaysia's palm oil inventory increased for the fifth consecutive month, rising to a three-year high of 2.4 million tons, an increase of 3.74% month on month; 45% higher than that in June; Compared with January, it increased by 55%. In November, the palm oil inventory continued to be 2.39 million tons, at a high level.
Domestic inventory: After the New Year's Day, the domestic palm oil port inventory continued to decline until June, and the inventory decreased from 600,000 tons in January to 240,000 tons. At the beginning of June, the palm oil inventory was at a historical low, only about 250,000 tons. After six months of continuous accumulation, the palm oil inventory had increased to 810,000 tons in November, more than three times higher than that in the beginning of June.
Futures: In 2022, the trend of palm oil futures is similar to that of cash, rising sharply and falling sharply, showing a roller coaster trend. In the first five months, the market kept rising, and the main contract of palm oil rose by more than 20%. In the second half of the year, the domestic continuous palm oil market fell with the market. The main contract fell by more than 5 months from 11,800 RMB/ton to 8,000 RMB/ton, a drop of more than 30%.
Demand side: In 2022, the catering industry as a whole will be under pressure, the prosperity will decline, the consumption demand of the global oil industry will be poor, and the centralized consumption of the domestic catering industry will be significantly reduced. In the traditional peak season, the demand for oil consumption will remain weak, leading to a sluggish oil market in the peak season and not in the slack season. The terminal industry will have limited support for the palm oil market.
Li Bing, an agricultural product analyst of SunSirs, believes that palm oil will experience a sharp rise and fall in 2022. Once it falls to the bottom, the market is closely related to Malaysia's palm oil output and domestic inventory. In 2023, the domestic spot market of palm oil will still show wide fluctuations, and the demand of the terminal catering industry will probably get better. In the new year, the palm oil market is expected to rise, mainly due to price fluctuations.
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