With Indonesia’s palm oil export ban, palm oil futures prices rose again.
China commodity futures opened on the night of April 22. Most oil commodities rose, and palm oil futures rose by more than 7%.
Palm oil is the largest vegetable oil variety in terms of production, consumption and international trade in the world. It is known as “the three largest vegetable oils in the world” together with soybean oil and rapeseed oil. Indonesia will restrict the export of palm oil, which also boosted the demand prospect of other vegetable oils. On the 22nd local time, ice Canadian rapeseed futures soared to a record high, while CBOT soybean oil rose more than 4% to an all-time high of 83.21 cents per pound.
At present, the world’s palm oil producing areas are mainly Indonesia and Malaysia, of which Indonesia accounts for about 60% of the world’s palm oil production. Relying on their own production advantages, Indonesia and Malaysia are also the world’s largest palm oil exporters, accounting for 90% of their total exports.
According to datayes statistics, Malaysian palm oil futures have risen 11% since April and nearly 35% during the year. The inventory did not increase but decreased, which continued to support the future price of palm oil. According to the data released by the Malaysian palm oil bureau, the inventory of Malaysian palm oil fell for five consecutive months at the end of March, the export growth exceeded expectations, and the import fell sharply, offsetting the increase in output.
It is worth mentioning that China’s palm oil consumption is completely dependent on imports. It is the second largest importer of palm oil in the world. Palm oil has become the second largest vegetable oil consumption in China after soybean oil.
Driven by the surge in international oil prices, the prices of vegetable oil futures in China also remain high. On the international market, CBOT soybean futures prices have increased by about 25% year to date, American soybean meal futures have increased by 18% year to date, and the main contract prices of rapeseed meal, palm oil and soybean meal futures have increased by 37%, 34% and 25% year to date respectively.
“Crude oil prices are highly correlated with oil prices, and high crude oil prices are also one of the reasons for pushing up edible oil prices.”. According to the analysis report of datayes, vegetable oils such as palm oil, rapeseed oil, soybean oil, peanut oil, corn oil and cottonseed oil can replace oil to some extent, and palm oil is the main raw material of biodiesel. With the soaring international crude oil prices, some European and American countries have put biodiesel plans on the agenda. Some enterprises use vegetable oil to process biofuels, which has contributed to the rise of edible oil prices.
In China’s futures market, as the price of palm oil futures continued to rise and exceeded 12000 yuan / ton, the trading volume of palm oil options reached new highs. The put options of the main series of palm oil options p2205 with exercise prices of 10000, 9000, 8000 and 7000 were actively traded and increased their positions significantly. Once on March 4, the transaction ratio of option futures was 19.8% and the position ratio of option futures was 63.9%, both reaching the highest level in history.
The market demand for risk management is also increasing. Fangshun United (Ningbo) supply chain Co., Ltd. is a trading enterprise focusing on palm oil basis trading. Zou Hailong, the head of the company’s business, told the first financial reporter that because the company is worried about the sharp fluctuation of palm oil price, the basis cost of transaction between the two sides can be reduced by combining the basis with the option structure.
Specifically, the company chose the put three neckline option portfolio strategy to preserve the unilateral position of 500 tons of 24 degree palm oil. According to Zou Hailong, the company sold put options with an exercise price of 6810 yuan / ton and call options with an exercise price of 7500 yuan / ton in late April, and bought put options with an exercise price of 7200 yuan / ton. The position was closed in late May. During this period, the price of palm oil rose from 7300 yuan / ton to 7510 yuan / ton, and the company’s profits were protected to some extent.
“Next, under the control of policies such as ensuring the supply and price of China’s bulk commodities, China’s inflation level is expected to remain within a controllable range, but there is still uncertainty about the future inflation trend.” Wen bin, China Minsheng Banking Corp.Ltd(600016) chief researcher, believes that, on the one hand, China faces the risk of imported inflation in the context of high global inflation. On the other hand, after the sharp rise in commodity prices last year, the prices of major energy and raw materials such as natural gas, palm oil and crude oil have risen significantly again since the beginning of this year, which has also put some upward pressure on CPI.
For the later trend of palm oil price, Guoyuan futures believes that from the perspective of weather conditions, the recent increase in precipitation in Southeast Asia affects the harvest progress, and there is a blow to the expected recovery of output in April. Under the background of upside down import profits, China’s supply has remained tight for a long time, and the basis will remain high until China’s low inventory problem is effectively solved.
