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)
 202020192020201920202019202020192020201920202019
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
March 862,300 1,170,400  407,500 2,440,200
April 929,650 1,198,800  381,900 2,510,350
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 oils in China jumped to an 8-month high at 2.44 million MT by end February this year. Although the level is 5% lower on Y-o-Y, it was a sharp rise of 17% or 358,000 MT against last month, and a drastic reverse of the reduction trend of stock witnessed since June 2019.

Among the 3 major oils, the significant rise in total stock came from SBO, which jumped by 330,000 MT against the end-stock recorded in Jan 2020, while the stock of PO & RSO rose marginally. This sharp rise could be attributed to the slowdown in demand for oils & fats especially from caterers and factories due to the delay in commencement of business or production under the current Covid-19 outbreak which has affected the life of almost all Chinese or those foreigners in China since the late January.  The SBO stock saw the biggest jump due to few reasons.

Firstly, as China’s weather is still remain cold in most parts of the country, the use of SBO is preferred as it is easier to handle in the liquid form especially for restaurants, hence, the manufacturers or crushers saw the demand of SBO is higher and produce more. Secondly, the PO price discount against SBO has narrowed to around RMB600/MT since December 2019, which give no incentive for traders and refiners to fractionate to lower melting points olein to substitute SBO for certain applications, as cost of fractionating RBD PL to low melting points olein (SMP <10C) would be around RMB700-800/MT. Hence, it is no more economical for the refiners to do so, and lower their focus to import and process these olein for the market, which led to lower import of PO in Jan 2020 and most likely for Feb 2020, which is forecasted to be only at 450,000 MT.

Nevertheless, if taken into account the stock of SBO and RSO stored in the form of soybean and rapeseed, total stock available in China in fact only jumped 262,000 MT as some of the soybean and rapeseed stock have been converted to SBO & RSO in the same month. This total stock level (in oils & oilseeds form) is suffice for China to last for more than 2 months especially when the current slowdown in economy activities might prolong into March.

Hence, in view of the current widespread of Covid-19 situation in China, the demand for oils & fats might take a change where PO demand might remain unchanged due to the increase in processed foods production, while demand of soft oils such as SBO & RSO may experience a slight dip as catering businesses are badly affected. Ongoing African Swine Fever (ASF) will lead most of the crushers to stay on side-line to monitor the situation of livestock industry before increasing their operation rate in next few months. However, we might not see large PO import quantity despite stable demand as again, the PO stock in China is considerably high, which make the price discount against SBO not attractive and deter the importers/traders to bring in more PO in near future.

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)
 202020192020201920202019202020192020201920202019
January657,547697,028153,08265,300191,371135,403261417,1401,002,041905,132
February672,605819,989234,37680,673233,285135,0501,5525566,3681,141,8181,042,636
March 747,858 99,696 186,244 1  1,033,799
April 716,486 126,138 212,394 1  1,055,019
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

Feb 2020 stocks are higher than Feb 2019, also as compared to most months in previous year. It is rumoured that these stock levels are at very low levels but these figures belie this notion.

Total stocks in Feb 2020 end are estimated at 1.142 MMT, up 14% from the previous month & up 10% from previous year. POP stocks have increased a mere 2% from previous month, whereas SBO/SFO have shown appreciable increase by 36%. SBO stocks have increased 53% and SFO stocks by 22%, signifying that Soft Oil imports would have again increased in Jan/Feb 2020.

The trade and industry, which was canvassing for an increase in the differential between CPO and RBD, was disappointed that the differential was brought down to 7.5% in Jan 2020, following the AIFTA and continues to work to increase the differential. The general anti-Malaysia feelings and price parities have also contributed to a shift to Soft Oils.

Demand for POP will be influenced by various factors such as restrictions on imports of RBD, and general feeling towards Malaysia. Ultimately, price parities will be the determining factor.

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)
 202020192020201920202019202020192020201920202019
January373,630383,0007,0004,500370,630388,300
February417,170366,0003,3009,700420,470375,700
March 359,750 18,000    377,750
April 326,870 23,500    350,370
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 February 2020, the edible oil stocks at Port Qasim Authority (PQA) and Karachi Port Trust (KPT) have recorded a figure of 420,470 MT which is 10.47% higher than the closing stocks of the previous month. Out of the total 420,470 MT of stocks available at Port Qasim Authority and Karachi Port, the stocks of palm olein are showing the highest share of 62.64% followed by RBD palm oil 23.84%, CPO 8.68% and soybean oil 0.78%. Palm oil and its various fractions have a share of 99.22% in the total ending stocks.

This is the first time that the stocks at local port in Pakistan have exceeded 400,000 MT. The optimum level of stocks in Pakistan is in the range of 275,000 MT to 300,000 MT, as this is the average monthly requirement of the industry. Existing stock level is due to high bookings and arrival in the months of January and February and current decline in international prices. The local wholesale market in Pakistan is currently selling cargo at a discount over international prices and this has slowed down the lifting of the cargo from bulking stations. This trend has caused major delays as it has been reported that 4-5 ships are currently waiting at the sea to discharge their cargo at the jetty.

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)
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
January 88,773 174,713 77,972 183,758 2,985 169,730 358,471
February 74,392 200,593 37,740 149,762 2,984 115,116 350,355
March 214,101 99,283 2,985 316,369
April 238,878 184,486 2,985 426,349
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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