Palm Oil Price Will Continue To Rise

Indonesia and Malaysia, which together account for more than 85% of the world's production, are the world's main producers of palm oil.Our country palm oil completely depends on the import, the main import country is Indonesia and Malaysia.

On the supply side, Indonesia's drought is likely to reduce output by as much in 2020 as it did in 2016.In Malaysia, palm oil production is set to decline due to drought in the second and third quarters of this year, with a lag of 6-9 months in the impact of climate change on palm fruit growth.

On the demand side, the B30 and B20 biodiesel policies in Indonesia and Malaysia will boost demand for palm oil, while the per capita growth of edible oil in India's population growth pole will boost demand for palm oil in the food sector.Palm oil supply and demand pattern significantly improved, more palm oil market prices.

In addition, with the arrival of the New Year's day and the Spring Festival, the consumption of edible oil in China will gradually flourish, and the purchase of palm oil and soybean oil by food manufacturers and catering institutions around the country will also increase compared with previous years, continuing to support the domestic price of palm oil.

Industry insiders said that with the international palm oil production lower than expected, inventory data decline, high import palm oil cost and future biodiesel policy support, palm oil prices at home and abroad will continue to maintain a strong trend, the downstream oil and chemical companies are expected to fully benefit.

Since the government announced in October that it would fully implement the biodiesel B30 plan in January 2020, domestic palm oil prices have seen a sharp rise, with the main contract for palm oil futures rising from rmb4,630 / ton to rmb5,730 / ton at one point in 2001.

Oil chemicals are mainly made from palm oil and palm kernel oil. On December 12, zanyu technology (002637.sz) issued a notice to acquire 60% of jinma oil with 108 million yuan, 65% of weitun biological and 65% of chengxin chemical with 88.51 million yuan, expanding the oleochemical business map again.As the domestic A shares the most pure oil chemical targets, zanyu technology or will become the biggest beneficiary of palm oil price rise.


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