POINTERS: China's Palm Oil Market Outlook in 2023

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Questions & Answers (11) :

Anthony Yap

1 year ago

Hi Dr Wang; During the first half of 2022; Dalian Palm Olein vs Soyoil spread , Palm Olein contracts having higher premium against soybean oil contract. What were the main factor contributed to this historical scenario? thank you. 前几个月为什么大连期货市场的棕榈油的价差大过豆油，是什么原因造成呢？

Kuay

1 year ago

Hi Dr Wang, Any idea when China can end the Zero Covid-19 policy? If YES; what the indication to monitor that China starting to ease that policy? Thank you.

wangjun:
China's epidemic prevention and control policies are constantly being optimized. Up to now, China has not announced when to end the dynamic zero clearing epidemic prevention and control policies. The specific contents shall be subject to the external release of the Chinese government.
1 year ago

Monica

1 year ago

When Chinese President Xi Jinping hold in-person talks in Beijing with his Indonesian counterpart President Joko Widodo on 26 July 2022. Any development related to palm oil matters been discussed? Thank You.

wangjun:
The Presidents of the two countries signed the Action Plan for Strengthening the Comprehensive Strategic Partnership (2022-2026), the "the Belt and Road" cooperation plan, and cooperation documents in economic and trade cooperation, digital economy, vocational education, medicinal plants and other fields. According to the official announcement, the actual purchase quantity and time of palm oil have not been announced.
1 year ago

Monica

1 year ago

What is the current VAT & Import duty for China on the following: a)RBD Palm Olein b)RBD Palm Stearin c)Crude Palm Oil d)RBD PALM OIL e)Crude Palm Kernel Oil (CPKO) f)Crude Coconut Oil g)Shortening? In small boxes : 20-25kg?

wangjun:
Import tariff is 9%, VAT is 9%
1 year ago

Anthony Yap

1 year ago

Hi Dr Wang; Is the weakening on RMB vs USD from 6.40 to 7.30 recently affected the importation of Palm Oil into China? 王骏，你好。人民币的贬值，是否是主要的原因造成棕榈油进口的下降。

wangjun:
The devaluation of the RMB has increased the cost of China's palm oil imports, which has a negative impact on China's palm oil imports, but the impact is not significant. Because the import quantity of palm oil depends more on the performance price ratio of palm oil, that is, whether palm oil has a price difference advantage compared with soybean oil.
1 year ago

William Yap

1 year ago

Dear Dr. Wang, China has been strict on importation of palm residues like POME since last year, please advise what is the current policy towards importation of palm residues like POME ?

wangjun:
The second paragraph of Article 8 of the Measures for the Administration of the Import of Solid Wastes stipulates that "it is prohibited to import solid wastes for the purpose of heat recovery". According to the regulations, wood chips, palm shells and other wood and cork wastes used for combustion are solid wastes that are prohibited from import in China.
1 year ago

William Yap

1 year ago

Dear Dr. Wang, Does your import China figures includes product like POME ? If yes, how many percentage from total China imports ?

wangjun:
not included
1 year ago

HCLeow

1 year ago

Dear Dr Wang, Another few follow up questions: 1. From the slide on palm oil usage in China - Industrial use (17%) is referring to which sector? Oleo? 2. On biodiesel, what is China policy on biodiesel? China import RBDPO or PME for this use? The biodiesel produce for local consumption or reexports? 3. Among the usage of palm oil in China, which segments has the highest growth and with potential to expand further? thank you.

wangjun:
1、The industrial uses of palm oil in China mainly fall into two categories: one is directly obtained from palm oil, such as soap, epoxy palm oil and its polyols, polyurethane and polyacrylate products; The other is oil chemical products, such as fatty acids, esters, fatty alcohols, nitrogenous compounds and glycerol. On the basis of these products, various derivative products can also be produced by different chemical methods. 2、China's biodiesel is mainly exported to EU. 3、From the perspective of market segments, the export market of biodiesel has the fastest growth. From January to August 2022, China's export of raw firewood increased 46% year on year.
1 year ago

WONG HOOI PENG

1 year ago

Hi Dr. Wang, From your slides, it is shown that China's soybean oil and rapeseed oil inventory are at multiyear low, except for palm oil which inventory has recovered significantly in a few weeks. However, the overall Domestic Oil Inventory is still in multiyear low. Given the huge discount of palm oil against soft oils and Spring festival is coming, do you think China will use this opportunity now to boost up total inventory with palm oil? What are the factors that stop them from doing so? Thank you.

wangjun:
From the perspective of the price difference between oils and fats, palm oil has a high-cost performance ratio, which is conducive to the increase of the proportion of palm oil consumption. At present, China's palm oil storage is relatively high, but the overall oil storage is at a seasonal low level. The peak oil consumption season of New Year's Day and Spring Festival is approaching, and China still has a demand for oil replenishment. The short-term import rhythm is determined by the import profits of palm oil.
1 year ago

HCLeow

1 year ago

Dear Dr Wang, 1. Do you think China will still import such high palm oil as palm oil inventory had replenished to pre-covid level? If you think this can sustain what are the factors behind the strong imports? 2. The recent China signed agreement with Indonesia government to import additional 2m tonnes from China. In our view, this 2m tonnes will be a new demand from China or this additional 2m tonnes will be taking from Malaysia market shares? 3. In your view, what should Malaysia palm oil exporters do to regain the palm oil market shares in China import? Thank you.

wangjun:
1. China still has import demand for palm oil. First, the peak oil consumption season of New Year's Day and Spring Festival is approaching. Second, the stocks of soybean oil and vegetable oil are low. Third, palm oil has a high-cost performance ratio. 2. The details of the agreement signed between China and the Indonesian government have not been released yet, and the actual situation needs to be officially announced. 3. The homogeneity of palm oil products is strong. China's purchase of palm oil products is mainly based on price factors and supply stability. With price advantages, sustainable and stable suppliers will gain greater market share.
1 year ago

WONG YQ

1 year ago

Demand in China very important for palm oil inventory. Every countries are welcoming the China open up. When China soften the travelling restriction, will this boost up economy and support the palm oil price in future? Or CPO price will still remain plateau with high stock level?

wangjun:
As China's economy continues to recover, plant oil consumption in tourism and catering industry is expected to show a restorative growth. In addition, the peak stock season of New Year's Day and Spring Festival has decreased, and the short-term plant oil consumption is more likely to improve. At present, the price performance of palm oil is higher than that of soybean oil. The better demand for plant oil in China will support the consumption and price of palm oil. However, the increase of palm oil price needs to be observed from November to next February.
1 year ago