China Edible Oils Market Sees Brief Bounce Amid Supply Concerns
The sentiment in China's edible oils market has recovered somewhat, but concerns about supply and demand remain. The Dalian Commodity Exchange (DCE) oil futures market saw a rebound in palm oil prices during the night session on September 30. The spread between soybean oil and palm oil futures contracts narrowed to -762 yuan/tonne from -844 yuan/tonne the previous day, but remains inverted.
The main bearish factor is Malaysia's continued high production levels, combined with weak export data. This has led to a prolonged period of weak supply-demand balance in the market. As of September 25, national commercial palm oil inventories stood at 968,400 tonnes, up 33,400 tonnes month on month and about 60% higher than the same period last year.
Despite the recent inventory build-up pressure, it is still unclear when production will turn around in October. The market is also keeping an eye on domestic import profit changes, which may impact the overall market sentiment.