Palm Oil Market! Now What Next?

PALM OIL MARKET

• Key market China’s financial hub of Shanghai said on Sunday all firms and factories would suspend manufacturing or have people work remotely in a two-stage lockdown over nine days, after it reported a new daily record for asymptomatic infections.
•  Oil prices dropped about $4 as concerns over slower fuel demand in China grew, making palm a less attractive option for biodiesel feedstock.
• Exports of Malaysian palm oil products for Mar. 1-25 fell 5% to 1,030,943 tonnes from the same week in February, cargo surveyor Societe Generale de Surveillance said on Sunday.
• The Malaysian Palm Oil Board (MPOB) revised upwards its outlook for 2022 crude palm oil price to an average of 4,250 ringgit ($1,008.78) a tonne.
• After the talks between the two sides, Russian Deputy Defense Minister Alexander Fomin said Russia had decided to “dramatically reduce military operations”, especially around Kyiv and Chernikov.

I mentioned some references before, Palm oil Market behavior looks very choppy in these days external factors were very active and after Russia decision it will be cool in coming days Question is this Should market goes down or stable, if we study the fundamentals its looks bearish.

Which Fundamentals create the weakness in the market?

1. Production increasing in both countries Malaysia, Indonesia
2. Demand is not picking up in Malaysia
3. Indonesia already issue the 3.5M contracts
4. Labour issued resolved, Border will open for foreigner workers
5. No restriction for acreage
6. New crops seasons
7. Key Buyers covered the Ramazan buying
8. high prices decreased the demand
9. Funds Shortage

These all chunks indicating market should goes down and its may correct $300 in couple of months and many external factors going to switch off in coming days.

Which factors going to switch off after Russia Tension :

1. Russia Ukraine tension going to ease its means Black sea traffic will be start with good sound.
2. Shipping cost will be reduce
3. Insurance cost will be reduce
4. Fertilizer cost will be reduce and operation will be start
5. Supply crunch will be ease
6. Sunflowers seed and wheat prices will go down
7. EU demand will be fulfill with sun oil and pressure will decrease on palm oil and mustard oil as well

Meanwhile soybean supply still tight from America side due to Latin weather.

I talked with many Forecasters and specialists these are all on one page currently edible oil prices are overvalued and hurting the demand and buying power with all means.

Abdul Hameed

Manzoor Trading Co

Lahore -Pakistan