According to data from SunSirs, the palm oil market saw mixed trends in June, characterized primarily by a fluctuating downward trend with a decline exceeding 3%. At the beginning of the month, the average market price was 9,520 RMB/ton; by June 29, it had fallen to 9,216 RMB/ton, a drop of 3.19%.

The main factors influencing the palm oil market in June were as follows:

Supply side: June marked the start of the traditional peak production season for palm oil in Malaysia. Production rose sharply by 16.92% month-on-month between the 1st and 25th, while exports increased by 10.6% during the same period.

Demand side: Indonesia's mandatory B50 biodiesel blending policy officially took effect on July 1, raising the palm oil blending ratio in diesel to 50%. This policy is expected to generate an additional 2–3 million tons of annual demand for palm oil-based biodiesel, diverting significant supplies to domestic consumption and constraining the global volume of palm oil available for export in the long term. Coupled with Indonesia's tightened controls on export qualifications, expectations of future supply contraction are clear, lending strength to long-dated futures contracts.

Domestic market: June is a traditional off-season for edible oil consumption. Basic demand from the catering and food processing sectors was sluggish, with end-users purchasing only as needed rather than stockpiling. Sluggish spot market trading was the primary reason for the weakness in near-term futures contracts.

Inventory: As of June 19, national commercial palm oil inventories stood at 669,100 tons. While there was a slight weekly reduction of 13,400 tons, the level remained 87% higher than the same period last year—a historical high for this time of year. Ample inventory has long suppressed the potential for a rebound in domestic near-term prices. Import margins are inverted, limiting the volume of arrivals.

In summary, as of early July, the domestic palm oil market is characterized by a tug-of-war between bullish and bearish factors. While production regions have entered a peak output cycle—introducing downward pressure on futures prices—and domestic essential demand has declined, the overall market trend remains one of fluctuating decline.

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