Core Viewpoint - Domestic palm oil prices have increased by 2.44% week-on-week in early December, driven by concerns over production cuts and shifting demand from India, with expectations of continued strong performance in palm oil prices as production cut forecasts materialize [1][7]. Group 1: Production Insights - Concerns over production cuts have been heightened due to weather disturbances affecting palm oil output, leading to price increases [1][7]. - The Malaysian Palm Oil Association (MPOA) reported a 4.38% month-on-month decline in crude palm oil production for November, exceeding previous estimates of a 2.9% drop, which supports price increases despite overall high production levels [3]. - November palm oil exports from Malaysia saw a significant decrease of approximately 15%, suggesting potential inventory accumulation despite production declines [3]. Group 2: Demand Dynamics - The price differential has led to increased demand for palm oil from India, with expected imports rising by 4.6% month-on-month to 630,000 tons in November [5]. - Indian refiners have canceled about 70,000 tons of soybean oil purchases scheduled for December to January due to rising global soybean oil prices, opting for more competitively priced palm oil instead [5]. - Currently, palm oil prices in India are over $100 per ton lower than soybean oil, enhancing the attractiveness of palm oil imports [5]. Group 3: Market Outlook - As weather-related factors diminish, market focus is shifting back to the fundamentals of palm oil, with close attention on high-frequency production and sales data from major producing countries and the upcoming MPOB report [7]. - If production cuts are confirmed to be more significant than anticipated, this could further support price increases [7]. - The domestic market is experiencing a subdued trading atmosphere, with some regions facing pressure to expedite transactions, which may limit upward price movement [7]. - Overall, the likelihood of a price rebound in December is high, with expectations for 24-degree palm oil prices to range between 8,660 and 9,000 yuan per ton [7].

Report Industry Investment Rating No relevant information provided. Core Viewpoints - Market expectations of potential inventory buildup in Malaysian palm oil in October led to a decline in palm oil prices. The BMD Malaysian palm oil 01 contract closed at 4,110 ringgit/ton on November 7, down 2.26% from the previous week, and the DCE palm oil 01 contract closed at 8,660 yuan/ton, down 1.19% from the previous week [8][11]. - In the international market, there are increases in both production and exports of Malaysian palm oil in October, and it is expected to continue to accumulate inventory. Indian palm oil imports in October dropped to a five - year low. The estimated palm oil production in Indonesia and Malaysia for the 2025/26 season is 5,100 million tons and 1,920 million tons respectively [28][31][32]. - In the domestic market, the inversion of palm oil's import profit margin narrowed this week, trading volume decreased, and inventory declined [37][39][41]. Summary by Catalog 1. Market Review 1.1 BMD Malaysian Palm Oil - As of November 7, the BMD Malaysian palm oil 01 contract closed at 4,110 ringgit/ton, down 2.26% from the previous week. The price decline was mainly due to expectations of inventory buildup in October, an estimated increase in production in the first 5 days of November, and a projected drop in Indian imports in October [8]. - SPPOMA and MPOA estimated a 5.55% and 12.31% month - on - month increase in Malaysian palm oil production in October respectively, and SPPOMA data showed a 6.80% month - on - month increase in production in the first 5 days of November [8]. - Three major institutions' high - frequency data predicted a 4.31% - 26.54% month - on - month increase in Malaysian palm oil exports in October [8]. 1.2 DCE Palm Oil - As of November 7, the DCE palm oil 01 contract closed at 8,660 yuan/ton, down 1.19% from the previous week. The price decline was affected by factors such as a drop in domestic palm oil import costs and expectations of inventory buildup in Malaysian palm oil in October [11]. - The inversion of the palm oil's import profit margin narrowed this week, and the inversion of the soybean - palm oil price spread continued to correct [11]. 2. Production Area Weather 2.1 Malaysian Production Area Weather - From November 1 - 7, precipitation in most areas was at or below the historical normal level, with some areas in the northwest, southeast of the Malay Peninsula, and southern Sarawak having 15 - 50mm more precipitation than normal [13]. - From November 8 - 14, precipitation in most areas is expected to be at or below the historical normal level, with some areas in the northwest and south of the Malay Peninsula expected to have 15 - 100mm more precipitation than normal [15]. 2.2 Indonesian Production Area Weather - From November 1 - 7, precipitation in most areas was at or below the historical normal level, with some areas in southern Sumatra, southwest and northeast Kalimantan having 15 - 100mm more precipitation than normal [19]. - From November 8 - 14, precipitation in most parts of Sumatra and Kalimantan is expected to be at or close to the historical normal level, with some areas having differences in precipitation compared to normal [21]. 3. International Supply and Demand 3.1 Malaysian Palm Oil Forecast for October - November - **Export Forecast**: AmSpec, ITS, and SGS data showed that Malaysian palm oil exports in October increased by 4.31%, 5.19%, and 26.54% respectively compared to the previous month [23][24][25]. - **Production Forecast**: SPPOMA data showed a 5.55% month - on - month increase in Malaysian palm oil production in October and a 6.80% increase in the first 5 days of November. MPOA data showed a 12.31% month - on - month increase in Malaysian crude palm oil production in October, reaching 2.07 million tons [28]. 3.2 Other Important News - Indian palm oil imports in October dropped to a five - year low, with a total import volume of 750,000 tons, lower than 980,000 tons in September [31]. - The estimated palm oil production in Indonesia for the 2025/26 season is 5,100 million tons, and in Malaysia is 1,920 million tons [31][32]. - Malaysian palm oil inventory in October is expected to rise to a two - year high, with an estimated inventory of 2.44 million tons, a 3.5% increase [34]. 4. Domestic Supply and Demand 4.1 Import Profit - The inversion of the palm oil's import profit margin narrowed this week [37]. 4.2 Palm Oil Trading Volume - As of November 7, the weekly trading volume of palm oil (spot trading + basis trading) was 6,000 tons, a decrease of 5,600 tons from the previous week, a decline of 48% [39]. 4.3 Palm Oil Inventory - As of October 31, 2025 (week 44), the commercial inventory of palm oil in key domestic regions was 592,800 tons, a decrease of 14,300 tons from the previous week, a decline of 2.36% [41]. 5. Domestic and International Vegetable Oil Futures and Spot Prices, and Price Spreads 5.1 Basis, Month - to - Month Spread, and Variety Spread - Information on palm oil basis, month - to - month spread, variety spread, and POGO spread is presented through various charts [45][49]. 5.2 Palm Oil Warehouse Receipt Quantity and Futures Open Interest - Information on DCE palm oil warehouse receipt quantity and 01 contract open interest is presented through charts [54]. 5.3 FOB Quotes - Information on Malaysian and Indonesian 24 - degree palm oil FOB quotes is presented through charts [57].