Sunsirs (20/07/2026) - According to data from SunSirs, the domestic palm oil market experienced wide fluctuations and minor adjustments during the first ten days of July. The average market price was 9,098 RMB/ton on July 1 and 9,112 RMB/ton on July 17, marking a 0.15% increase.

Supply side: The June report from the Malaysian Palm Oil Board (MPOB) indicated that Malaysian palm oil inventories had risen for the third consecutive month, reaching 2.5441 million tons by the end of June—a high for the same period in recent years. July remains part of the traditional peak production season; high-frequency data shows month-on-month production growth in early July, and the market generally anticipates continued inventory accumulation.

Domestic market: By early July, domestic commercial palm oil inventories had climbed above 750,000 tons, showing a significant year-on-year increase. Spot basis prices weakened, limiting upward price momentum.

Demand side: The domestic palm oil market is in a seasonal consumption lull. Additionally, the price spread between soybean oil and palm oil is narrow, leading to substitution by soybean oil in end-user demand. This substitution effect is driven by high soybean oil inventories and low prices; with the spread remaining narrow, food manufacturers prioritize soybean oil purchases, diverting demand away from palm oil.

Policy side: Indonesia officially implemented its B50 biodiesel policy on July 1, which is expected to generate approximately 5.3 million tons of additional annual demand for palm oil. Although the policy is currently in a transition phase with limited short-term impact, it has injected strong long-term bullish expectations into forward contracts.

In summary: For the latter part of July, domestic palm oil fundamentals remain dominated by bearish factors—specifically ample supply and weak demand—leading to a softening market trend.

Technical analysis indicates that palm oil prices remained at low-to-mid levels in early July, with room for further decline. In late July, the overall upward momentum is expected to slow, with the market likely to fluctuate within the 9,000–9,200 RMB/ton range.

Read more at https://www.sunsirs.com/commodity-news/petail-34562.html