The price of palm oil has played the fall of the previous two weeks
Yesterday futures on the of palm and soybean oil due to the rapid growth almost recovered to the level that preceded the panic of the collapse caused by the epidemic coronavirus. It will support quotations of sunflower oil and the purchase prices for sunflower seeds in Ukraine.
Futures on palm oil exchange in Malaysia on Wednesday rose by 5.1% to 2804 Ringgits/t or 681,74 $/t amid lower production and stocks of palm oil in the country. Due to a seasonal slowdown and dry weather Malaysia in January reduced the production of palm oil in comparison with December by 9% to 1.21 million tonnes, which is the lowest indicator since March, 2016, While palm oil exports fell 8.2% to 1.28 million MT due to lower demand from key buyers India and China. India last month bought only 40,5 thousand tons of palm oil, while in January 2019 imported 201,4 thousand tons. China has reduced the purchase of oil through the epidemic coronavirus.
According to experts, palm oil stocks in Malaysia at the end of January have decreased compared to the previous month by 12% to 1.76 million tonnes, the lowest level since June 2017
Futures for soybean oil in the United States yesterday increased by 3% to a weekly high 697,7 $/t after the rising prices of palm oil and oil. Markets hope that the epidemic is not too change the level of consumption of products in China. However, the peak incidence is expected next week, then it will be possible to evaluate the real consequences for the Chinese economy.
March soybean futures remain stable at the level 324,6 $/t due to low export demand, especially from China. The market has supported the news about the purchase of Chinese state-owned companies, Cofco and Sinograin 1 million tonnes of Brazilian soybeans new crop, although experts expect the intensification of procurement in the United States. This reinforces the concerns of the American traders regarding China's intent to comply with the terms of the first part of the trade agreement signed in January.
Rise in price of palm oil will increase the demand for Ukrainian sunflower oil from India and China. Today we will know how to restore prices of sunflower oil after the previous falling to 720-730 $/t FOB.