Monthly Stock Comparison 2020

Monthly Stock Comparison 2020

Country : China
Oils and Fats Ending Stocks 2018/2019
 Palm Oil (MT)Soybean Oil (MT)Sunflower Oil (MT)Rapeseed Oil (MT)Other Oils (MT)Total Ending Stocks (MT)
January1,024,200704,600762,5001,255,800 297,400519,0002,084,1002,479,400
February1,053,100887,9001,092,0001,203,300 300,600485,0002,445,7002,576,200
March878,800862,300952,8001,170,400 262,800407,5002,094,4002,440,200
April607,000929,650700,2001,198,800 146,800381,9001,454,0002,510,350
May 825,000 1,180,200  440,400 2,445,600
June 754,700 1,280,000  502,700 2,537,400
July 716,900 1,163,200  460,700 2,340,800
August 651,000 1,122,300  385,800 2,159,100
September 653,600 1,134,200  386,400 2,174,200
October 708,550 1,098,600  391,300 2,198,450
November 780,000 924,200  317,800 2,022,000
December 842,700 790,800  344,500 1,978,000

Total ending stock of 3 major vegetable oils in April extended its sharp drop from the previous month and recorded a decline of 30.6% or 600,400 MT M-o-M. This has also brought the stock level to record low of 1.45 million MT, the lowest since May 2016. The decline in stock is mainly due to the further resumption of remaining manufacturing activities in which is believed to reach almost 100% as per pre-covid-19 outbreak in Apr. Unfortunately, the arrival of PO and SBO in March declined and coupled with the drop of soybean import in the same month, this contributed to the lower availability of oils and oilseeds for applications and resulted in the drawdown of stock.

The PO import remains sluggish due to its unfavourable discount against SBO, which is averagely below RMB800/MT up to April 2020.  This led importers/traders to anticipate a poor pick-up of PO especially when the weather is still cold in most parts of China and deterred their buying interest.   This also explained why although the import data for Apr is not available at this moment, the expected arrival of PO shipments remained low at around 370,000 MT (against 469,114 MT in Apr 2019) and contributed to the drop in PO’s stock in Apr. However, with the temperature slowly rising from the south to north, the required discount of PO against SBO is getting lower to enable PO to be used (with or without fractionation) throughout the country, and will see PO demand pick up from June onwards.

Another factor that may trigger more import would be the improved import margin brought by the low stock in domestic market and ample supplies from countries of origin.  This will definitely lure some importers back into PO market to take advantage of the positive margin slowly appearing since Apr.  However, as mentioned earlier, the higher arrival of PO might only be seen in June and hence, the country may see further drop in stock by end May before a possible pick up in June this year.

Similar to PO, SBO also experienced a drastic drop in stock as of end Apr by 252,600 MT or 26.5%, primarily attributed to the growth in demand but poor output and import volume. The import of soybean in March was rather low (declined by 13% Y-o-Y) due to the delay in soybean shipments from Brazil, while the anticipated Apr arrival of soybean shipments which is almost at par against last year was still unable to satisfy the strong demand of SBO in Apr as crushing activities remain low.  We might be seeing some replenishment of SBO in May with the gearing up of crushing activities due to the higher arrival of soybean in May which is estimated at 10.0 million MT (7.36 mil MT for May 2019).

For May, the demand and import for PO might remain weak, despite the improvement in both import margin and discount against SBO.  This is in view that the higher crushing activities in May after some stopped their operation due to shortage of soybean supplies, and may churned out more SBO into the local market.  The factor that may swing the favour towards higher PO import is the higher CPO output in both Malaysia and Indonesia, where CPO price will be lowered to improve the discount against SBO.

Country : India
Oils and Fats Ending Stocks
 Palm Oil (MT)Soybean Oil (MT)Sunflower Oil (MT)Rapeseed Oil (MT)Other Oils (MT)Total Ending Stocks (MT)
May 651,547 45,372 189,787 1  886,707
June 610,929 63,809 142,255 1  816,994
July 586,876 109,741 171,870   868,487
August 641,586 161,465 154,987 5,544  963,582
September 742,610 257,622 152,666 4,050  1,156,949
October 754,758 346,360 169,566 3,514  1,274,198
November 646,662 161,560 151,209 1,352  960,783
December 682,622 121,685 114,572 32  918,911

April 2020 stocks are 18% lower than April 2019 and 15% lower than Mar 2020. In addition, it is estimated that the pipeline after the domestic manufacturing, i.e. the distribution chain, has also been significantly depleted. This is a function of lower imports due to the COVID-19 related fall in demand, specially from the HORECA segment. Problem has been compounded by disruption in the manufacturing sector arising out of the lockdown challenges.

PPO stocks have decreased by 7% compared to previous month whereas soft oil stocks have reduced by 24%. In the soft Oils, CSFO stocks have not shown any decrease but CDSBO stocks have decreased by almost 50%. The focus of the industry has, temporarily shifted from import duty matters to challenges faced in keeping their operations going. At the same time, they are fighting the issuance of import licenses for RBD imports and preferential imports under SAFTA.

Country : Pakistan
Oils and Fats Ending Stocks
 Palm Oil (MT)Soybean Oil (MT)Sunflower Oil (MT)Rapeseed Oil (MT)Other Oils (MT)Total Ending Stocks (MT)
May 270,906 8,000    278,906
June 302,890 34,840    337,730
July 305,300 34,000    339,300
August 310,474 36,610    347,084
September 286,880 27,148    314,028
October 326,130 11,050    337,180
November 302,000 14,000    316,000
December 359,045 8,500    367,545

At the end of April 2020, the edible oil stocks at Port Qasim Authority (PQA) and Karachi Port Trust (KPT) have recorded a figure of 316,405 MT which is 16.82% lower than the closing stocks of the previous month.

Out of the total 316,405 MT of stocks available at Port Qasim Authority and Karachi Port, the stocks of palm olein are showing the highest share of 61.66% followed by RBD palm oil 25.63%, CPO 7.59% and soybean oil 0%. Palm oil and its various fractions have a share of 100% in the total ending stocks.

The stocks have seen consistent reduction for two months in a row and have declined from 420,470 MT at the end of February to 316,405 MT at the end of April. This decline was primarily due to lower than expected arrivals of oils and fats in the months of March and April so the increased demand generating for the month of Ramadan was met with existing stocks which were maintaining a high level in the beginning of the year. The stocks in Pakistan might start climbing up again from the month of May which is due to slowing down of cargo lifting due to extended lockdown in the country and winding demand post Ramadan period. It will depend on the arrivals of oils and fats in the months of May, which are currently anticipated to be over 250,000 MT.

Country : Bangladesh
Oils and Fats Ending Stocks
 Palm Oil (MT)Soybean Oil (MT)Sunflower Oil (MT)Rapeseed Oil (MT)Other Oils (MT)Total Ending Stocks (MT)
May 181,574 210,077 2,985 394,636
June 125,892 174,428 2,985 303,305
July 125,038 143,939 2,985 271,962
August 76,759 146,987 2,985 226,691
September 87,959 157,736 2,985 248,680
October 120,450 146,725 2,985 270,160
November 96,599 67,160 2,985 166,744
December 74,967 38,335 2,985 116,287
Country : USA
Oils and Fats Ending Stocks
Palm Oil (MT) Soybean Oil (MT) Sunflower Oil (MT) Rapeseed Oil (MT) Other Oils (MT) Total Ending Stocks (MT)
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
January 155,000 146,000 689,000 862,000 38,300 42,000 132,300 110,000 887,000 698,000 1,901,600 1,858,000
February 149,000 950,000 37,900 99,100 527,600 1,763,600
March 141,500 895,400 35,400 113,600 550,500 1,736,400
April 153,200 840,000 38,800 109,700 511,200 1,652,900
May 139,870 910,000 66,890 89,153 529,000 1,734,913
June 159,300 885,000 45,900 92,300 492,200 1,674,700
July 179,700 905,000 55,400 104,000 518,000 1,762,100
August 171,200 780,000 45,000 135,000 521,600 1,652,800
September 175,600 776,000 51,200 145,000 575,000 1,722,800
October 154,200 810,000 41,500 155,000 610,000 1,770,700
November 181,000 825,000 47,600 170,100 625,000 1,848,700
December 179,400 656,000 52,300 175,200 676,100 1,739,000

Source: MPOC Market Intelligence

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