January 28, 2022, the last trading day of the commodity futures market in the Year of the Ox. The overall performance of the commodity market is calm, while oil prices continue to rise, with a great momentum of rushing to historical highs.
With the introduction of the policy of Indonesian to restrict palm oil export, combined with the weather factors in South America, international oil prices have further changed suddenly. Malaysia palm oil prices have set a new historical record, while domestic palm oil, soybean oil and other oil prices are approaching the 10,000 yuan mark, all of which are only one step away from the historical high.
In fact, the world has been in a tight supply of vegetable oil since the second half of 2020, but it has not improved for more than a year. In the past 2021, oil varieties have continued to rise. According to statistics from the Food and Agriculture Organization of the United Nations, the prices of various vegetable oils, including palm oil, soybean oil, sunflower oil, , etc., rose by 65.8% in 2021 compared with the 2020 level. This is not only the largest increase in among the main food types counted by the agency, but also the largest annual increase in vegetable oil prices since statistics.
Indonesia introduced policies to restrict palm oil exports
January 27, against the backdrop of a sharp rise in the US dollar, the Malaysian Derivatives Exchange (BMD) gross palm oil futures closed up more than 2 percentage points, setting a record high again, with an intraday high of RM5,380/ton. This is also the third consecutive trading day to rise.
On the same day, the Indonesian Trade Minister announced a new regulation that mandates all edible oil exporters to sell 20% of the planned export of edible oil in the domestic market. Indonesia is the world's number one palm oil producer and exporter. In 2021, Indonesia's domestic palm oil prices rose by about 40% year-on-year. Restrictions may drive global edible oil prices to further rise. During the overnight trading session of
27, the international crude oil futures once broke through the $90 mark, setting a new high in seven years. Rising crude oil has improved the outlook for biofuel demand, while palm oil is the raw material for the production of biodiesel in Malaysia and Indonesia. This helps offset the impact of a decline in export demand. Boosted by this, Chicago soybean oil futures rose 2.3%, setting a seven-month highest level.
In the past year, the problem of low palm oil supply in Malaysia and Indonesia has not been resolved for a long time. Mainly due to the epidemic situation, Malaysia's labor shortage has intensified, and the resumption of Malay palm oil in 2021 is lower than expected, while Indonesia's palm oil production in 2021 is also lower than expected due to excessive rainfall. Indonesia's restrictive measures may further add fuel to the fire.
htmlOn January 28, after the closing of the last trading day of the domestic Year of the Ox commodity futures market, the quotation of the 2205 contract for domestic soybean oil futures contract was 9,836 yuan/ton, and the quotation of the 2205 contract for palm oil futures contract was 9,934 yuan/ton. Both of them were approaching the 10,000 yuan mark, both of which were only one step away from the historical high.Domestic oil and fat inventory is relatively low, at a low point in the past five years
"Domestic palm oil inventory is now at the lowest level in the past five years, while soybean oil inventory is still at the lowest level in the same period in the past four years." Southwest Futures Oil and fat oil analyst Huang Ting said that domestic oil and fat inventory is relatively low, and the market price is also at a historical high, which has fully realized the favorable factors of low inventory.
For the palm oil market in Southeast Asia, what can really have a large negative impact on palm oil is still the expectation of solving the labor problem in Malaysia. Under the troubles of the epidemic, it is still difficult to solve it as soon as possible. This will also make the domestic palm oil import cost continue to be high, and will ultimately support the high operation of palm oil futures prices.
National Grain and Oil Information Center report believes that the trend of crude oil price is relatively firm, and oil prices are still supported. It is expected that domestic soybean arrivals in January and February will decline year-on-year, and soybean and soybean oil inventories will be at a low level, which will support the soybean oil basis quotation to remain firm. In the short term, the fundamentals of domestic and foreign oil supply and demand will not change much, and the tight situation is still continuing. It is expected that the oil price will continue to decline.
htmlOn January 28, data released by Ministry of Agriculture and Rural Affairs showed that my country's agricultural product import and export volume was US$304.17 billion, an increase of 23.2% year-on-year. Among them, grain imports surged and soybean imports fell.Soybean imports were 96.518 million tons in 2021 and 100.315 million tons in 2020, a year-on-year decrease of 3.797 million tons. Soybean production is only 16.4 million tons in 2021, which means that the import dependence of soybeans is 85.5%.At the same time, domestic oil and fat import costs continue to rise in 2021. Statistics from of the General Administration of Customs show that in 2021, 11.315 million tons of edible vegetable oil were imported, a year-on-year decrease of 3.2%, but the import volume was US$11.57 billion, a year-on-year increase of 32.8%. Obviously, behind this is the further increase in oil prices.
The tension in the international oil market may further exacerbate
In addition to the tension in palm oil market in Asia, since late January, the geopolitical incident between Russia and Ukraine has caused market concerns about the export of sunflower seeds, sunflower oil and cuisine products in these two countries, and may further exacerbate the global supply of vegetable oil.
Ukraine is known as the European granary and is an important participant in the global agricultural product market. It is China's largest sunflower oil importer and the second largest corn importer. At the same time, Ukraine is also the world's largest sunflower oil exporter.
In addition, in South America, due to weather impact, analysis agencies are also adjusting production expectations. On January 27, the Brazilian Vegetable Oil Industry Association (ABIOVE) released a report, lowering the forecast value of Brazilian in 2022 to 135.8 million tons, down 4.2 million tons from earlier expectations. Due to the reduction in production, Brazil's soybean export expectations in 2022 were also lowered from 91.1 million tons to 86.9 million tons. ABIOVE said that if the weather conditions caused by the La Niña phenomenon cause greater damage to the crops, the agency does not rule out the possibility of further lowering the forecast.
consulting agency IHSMarkit released a report on January 26, which is expected to reach 87.805 million acres in the United States in 2022, which is lower than the 88.815 million acres predicted by the company on December 16, but higher than the 87.195 million acres in 2021.
China's agricultural product futures trading volume has led internationally
2021 Global trading volume data statistics from Futures Industry Association (FIA) have been released recently, and the domestic agricultural product trading situation is particularly impressive.
data shows that in the global agricultural product trading volume ranking in 2021, Chinese varieties ranked the top 11, occupying 15 seats in the top 20, including soybean meal, rapeseed meal , soybean oil, palm oil, corn, natural rubber, pulp, sugar, cotton, rapeseed oil, apple, egg, corn starch, yellow soybean No. 1, soybean meal option .
Source: Securities China
Column Editor: Qin Hong Text editor: Li Linwei Title picture source: Tu Chong Picture editor: Cao Liyuan
Source: Author: Securities China Changliu
1Source: Author: Securities China Changliu
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