According to spot market data from SunSirs, domestic palm oil prices experienced volatile declines during the first ten days of April. On April 1, the average market price for palm oil stood at 9,750 RMB/ton; by April 14, the average price had fallen to 9,244 RMB/ton—a price drop of 5.19%.

Fundamental Support (News-driven): Enhanced energy market correlation—the escalation of the conflict in the Middle East drove crude oil prices higher. This highlighted palm oil's role as a biodiesel feedstock, causing the biodiesel premium to rise and directly boosting market sentiment within the broader oils and fats sector.

Tight Supply: Palm oil inventories at the end of March stood at 2.27 million tons, a month-on-month decrease of 16.1%. Furthermore, Malaysian palm oil exports between April 1 and April 10 fell by 42.6% to 56.7% compared to the previous period.

Favorable Policies: Expectations surrounding Indonesia's B50 biodiesel mandate (scheduled for implementation in July)—coupled with an increase in the April export tax to $148/ton—have effectively reduced the volume of palm oil available for trade.

Improving Demand: The second quarter marks the arrival of the traditional peak season for the downstream catering industry. This has triggered a wave of restocking demand from food processors, leading to a resurgence in the underlying, essential demand for oils and fats.

Fundamental Headwinds (News-driven): Profit-taking and capital withdrawal—following the breach of the 10,000 RMB/ton mark, long positions were liquidated en masse. This tightened liquidity on the futures exchange, triggering a "stampede-style" sell-off; consequently, both open interest and trading volume declined throughout the month. A high-level correction in crude oil prices—driven by expectations of an easing situation in the Middle East—caused the oils and fats sector to weaken in tandem, thereby diminishing the supportive influence of palm oil's energy attributes.

Supply-side Headwinds: Rising expectations of increased production in origin regions—Southeast Asia has entered its seasonal production growth period (April through October). In early April, palm oil output in Malaysia rose by 15.63% month-on-month (according to SPPOMA data). This gradual easing of supply conditions has capped the potential for further price upside. Additionally, import margins have turned negative (inverted)—domestic market prices are currently lower than import costs. This has dampened traders' willingness to book shipments, resulting in insufficient arrivals at ports and further exerting downward pressure on spot market prices.

In Summary: During the latter half of April, the fundamental landscape for domestic palm oil remains a complex mix of bullish and bearish factors. While origin regions have entered their production growth cycle—leading to volatility in futures markets—the underlying, essential demand for palm oil within China has increased. Consequently, market prices are expected to exhibit a mixed trend, fluctuating between gains and losses.

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