PALM OIL Trend (May 20-24, 2024)

▶ Palm oil production and export supply began to recover in April, reversing the year-on-year declines recorded in the previous two quarters.
▶ Palm oil export supply is now increasing, which is what consumers in India, China, and other countries have been waiting for.
▶ The projected decline in global sunflower oil exports over the next 3-4 months will contribute to increased palm oil purchases and support prices.

1. Palm Oil Production Recovery: Palm oil production and export supply have begun to recover since April. This is a positive sign that reverses the year-on-year decline trend of the previous two quarters.

2. Decreased Inventory Levels: As of the end of March 2024, global palm oil inventories have decreased significantly to 13.4 million tons. This is due to lower-than-expected production in major producing countries such as Indonesia, Thailand, Guatemala, and Colombia. Also, as palm oil prices have risen, consumers have switched to other oils, leading to a decrease in global palm oil exports.

3. Improved Price Competitiveness: Recently, palm oil prices have become more competitive compared to Argentinian soya oil and Black Sea sunflower oil, leading to an increase in export supply. This is positive news for major consuming countries such as India and China.

4. Pent-up Demand: Due to lower import volumes in major consuming countries, palm oil inventories have decreased considerably in part. This suggests that there is pent-up demand for palm oil in the future.

5. Future Outlook: It is expected that the decline in global sunflower oil exports over the next 3-4 months will contribute to increased palm oil purchases and support prices. In particular, global palm oil exports are expected to recover to 25.9 million tons from April to September 2024, primarily thanks to Indonesia.

This situation necessitates an in-depth analysis of the palm oil market, and market participants should monitor these changes and make strategic decisions.