1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Overall, the report expects the overall trend of oils and fats to be oscillating upward, but currently lacks strong drivers. Without positive macro - capital support, the upside potential for oils and fats is limited. It also suggests paying attention to the arbitrage opportunity of going long on palm oil and shorting rapeseed oil in the first quarter due to the abundant rapeseed harvest and palm oil inventory reduction [8]. 3. Summary by Relevant Catalogs 3.1 Viewpoint Strategy - CBOT soybeans are unlikely to fall below 1000 cents per bushel. If the U.S. biodiesel policy is favorable, it is expected to oscillate upward. Palm oil prices are unlikely to break through 10,000 yuan per ton. Rapeseed oil will be under pressure in the first half of the year. The overall trend of oils and fats is expected to be oscillating upward, but the upside potential is limited. Pay attention to the arbitrage opportunity of going long on palm oil and shorting rapeseed oil in the first quarter [8]. - The main influencing factors include South American weather, trade policies, biodiesel policies, and Indonesian palm oil production [9]. 3.2 2025 Oils and Fats and Oilseeds Market Review 3.2.1 Oils and Fats Unilateral Review - In 2025, the overall trend of oils and fats was slightly upward with oscillations, showing a differentiated trend. Palm oil prices were volatile, with significant drops in October. U.S. soybean oil prices rose significantly, while rapeseed oil prices fell due to abundant supply. The market was affected by various factors such as USDA reports, U.S. biodiesel policies, and geopolitical conflicts [12][15]. 3.2.2 Oils and Fats Spread Review - The spreads between soybean - palm oil and rapeseed - palm oil changed throughout the year, affected by factors such as palm oil seasonal production, global rapeseed production, and anti - dumping investigations [20]. 3.2.3 Protein Meal Unilateral Review - Protein meal prices were volatile, affected by factors such as USDA reports, U.S. tariff policies, and soybean import volumes. The prices of soybean meal and rapeseed meal showed different trends at different times [23]. 3.2.4 Protein Meal Spread Review - The spread between soybean meal and rapeseed meal mainly oscillated between 350 - 550, with significant changes in March, April, August, and November, affected by tariff policies and anti - dumping investigations [27]. 3.3 Global Oils and Fats and Oilseeds Supply - Demand Analysis 3.3.1 Global Oilseeds - Global oilseeds are in abundant supply with variety differentiation. In the 2025/26 period, the total global oilseed production is expected to be 690.255 million tons, an increase of 5.75 million tons year - on - year. The production of soybeans decreased by 4.613 million tons, while the production of rapeseed increased by 9.274 million tons [31][32]. - Global vegetable oils are expected to see a slight reduction in inventory, while the inventory of protein meals will remain largely unchanged. In the 2025/26 period, the global vegetable oil production is expected to be 233.288 million tons, an increase of 3.732 million tons year - on - year, and the inventory will decrease by 0.393 million tons. The global protein meal production is expected to be 393.578 million tons, an increase of 7.538 million tons year - on - year, and the inventory will remain basically the same [35][37]. 3.3.2 Soybean Series - Global soybean production is decreasing and inventory is being reduced. In the 2025/26 period, the global soybean production is 422.541 million tons, a decrease of 4.613 million tons year - on - year. The production in the U.S. decreased by 3.296 million tons, while that in Brazil increased by 3.5 million tons, and that in Argentina decreased by 2.608 million tons [41]. - U.S. soybean production decreased, and the planting cost increased slightly. The planting area decreased by 6.2 million acres, and the production decreased by 121 million bushels. The estimated planting cost in 2026 is 678.25 dollars per acre [44]. - U.S. soybean crushing demand is strong, and the export proportion is decreasing. In the 2025/26 period, the estimated crushing volume is 2.555 billion bushels, an increase of 4.50% year - on - year, and the export volume is expected to decrease by 6.73 million tons [50][54]. - Brazil's soybean planting area is increasing, and the production and export volume are expected to increase. In the 2025/26 period, the estimated production is 177 million tons, an increase of 3.29% year - on - year, and the export volume and crushing volume are expected to increase [56][66]. - Argentina's soybean production is expected to decrease slightly, but the export volume increased significantly in 2024/25 due to abundant production and reduced export taxes. In the 2025/26 period, the estimated production is 48.5 million tons, a decrease from the previous year [70][74]. 3.3.3 Palm Oil - Malaysia's palm oil production increased in 2025, but exports were weak, and inventory accumulated to a high level. The production from January to November was 18.4541 million tons, an increase of 3.38% year - on - year, and the export volume decreased by 10.41% [83][87]. - Indonesia's palm oil production increased in 2025, and the inventory remained low. The production from January to September was 43.34 million tons, an increase of 11.31% year - on - year. The export volume increased, and domestic consumption also increased [99][106]. 3.3.4 Rapeseed and Sunflower Seeds - Global rapeseed production is abundant, and supply is sufficient. In the 2025/26 period, the global rapeseed production is expected to be 95.273 million tons, an increase of 9.274 million tons year - on - year. The期末 inventory increased by 2.65 million tons to 12.5 million tons [110][111]. - Global sunflower seed production decreased slightly, and sunflower oil inventory continued to be reduced. In the 2025/26 period, the global sunflower seed production is expected to be 51.77 million tons, a decrease of 0.37 million tons year - on - year, and the sunflower oil inventory decreased by 0.4 million tons to 2.28 million tons [136]. 3.3.5 Oils and Fats Demand - Global vegetable oil consumption is increasing year by year. In the 2025/26 period, the estimated consumption is 227.94 million tons, with edible consumption accounting for 71.54% and industrial consumption accounting for 28.00% [141]. - India's vegetable oil demand is increasing year by year, and the import volume is expected to be large in the first quarter of 2026 due to low inventory and Ramadan stocking demand [145]. - U.S. biodiesel production and sales decreased significantly in 2025, but the production is expected to increase in the future. The U.S. biodiesel policy is still uncertain, and it may increase the demand for 1.5 million tons of soybean oil [149][154]. - Indonesia's biodiesel demand is increasing, and the implementation of B50 is expected to increase the demand for 3 million tons of CPO, but it is unlikely to be implemented before 2027. The implementation of B45 may increase the demand for 1.6 million tons of CPO [158][159]. - Brazil's biodiesel blending ratio is continuously increasing, and the demand for soybean oil is expected to increase significantly. If the blending ratio increases to 16% in 2026, it is expected to increase the demand for 400,000 tons of soybean oil [163]. - The production of biodiesel in the EU increased slightly, but the use of vegetable oils decreased, and the use of UCO, animal fats, and other raw materials increased [166][167]. - The global use of vegetable oils for biodiesel production is continuously increasing [171]. 3.4 Domestic Oils and Fats and Oilseeds Supply - Demand Analysis - The domestic soybean inventory is high, and the import volume is expected to increase in the 2025/26 period. The import volume from January to November 2025 was 103.78 million tons, an increase of 6.89% year - on - year. The estimated import volume in the 2025/26 period is 112 million tons, an increase of 4 million tons year - on - year [176]. - The domestic palm oil import volume was low in 2025, and the inventory is expected to decline [187]. - The domestic rapeseed import volume decreased significantly in 2025, and the supply of rapeseed is expected to be tight in the 2025/26 period. The import volume from January to November 2025 was 2.4479 million tons, a decrease of 57.67% year - on - year [192]. - The inventory trends of the three major oils and fats are differentiated. As of the 51st week, the soybean oil inventory was 1.1235 million tons, an increase of 17.90% year - on - year; the palm oil inventory was 700,000 tons, an increase of 30.01% year - on - year; and the rapeseed oil inventory was 303,000 tons, a decrease of 27.65% year - on - year [197]. - The demand for protein meals is expected to decrease due to the reduction of pig and poultry farming capacity [201][206]. - The supply of soybean meal is sufficient, and the inventory of rapeseed meal is continuously being reduced [209]. 3.5 Market Outlook - Supply: Globally, focus on whether the expected abundant South American soybean harvest is realized and whether the palm oil production in Malaysia and Indonesia can remain high. Domestically, focus on China - U.S. and China - Canada trade policies [213][214]. - Oils and Fats Demand: Globally, the consumption of oils and fats is increasing year by year. The growth of edible consumption mainly depends on India, and the growth of biodiesel consumption mainly depends on the biodiesel policies of Indonesia, the U.S., and Brazil [216]. - Protein Meal Demand: The demand for protein meals is expected to decrease due to the reduction of pig and poultry farming capacity. The prices of soybean meal and rapeseed meal are mainly affected by external oilseed prices [219].

Report Title - Fuzzy Demand Drivers and Flocking Supply - Outlook for the Annual Vegetable Oil Market in 2026 [1] Report Date - December 15, 2025 [1] Report Author - Li Junyu, Investment Consulting Practitioner Qualification Number: Z0021380, lijunyu@gtht.com [2] Report Investment Rating No investment rating was provided in the report. Core Viewpoints - Vegetable oils are in a situation of weak current reality with improving expectations. In the 25/26 season, the inventory-to-sales ratio of the four major vegetable oils increased slightly. The year 2026 is a period of hibernation and preparation for a breakthrough. The inventory increase of only 1 million tons is easily affected by the US biodiesel policy for soybean oil and unexpected palm oil production. Starting from the first quarter of next year, there is room for palm oil, domestic soybean oil, and US soybean oil to reverse the weak reality. However, the uncertainty of whether palm oil production can increase regularly makes the supply trading full of variables and unsmooth. It is necessary to observe the performance during the low-production period. After the high-production trading is fully priced in, it is advisable to build long positions in palm oil 09 contracts on dips. Soybean oil can also be lightly allocated long in the first quarter. Rapeseed oil prices face the risk of being relatively weak among varieties, and it is mainly recommended to build short positions in rapeseed oil 05 contracts driven by events [2]. Summary by Directory 1. Review of the Vegetable Oil Market in 2025 - **First Stage (December 2024 - Mid-to-Late January 2025)**: The supply pressure of new Brazilian crops and the depreciation of the real led to a continuous decline in Brazilian soybean premiums since December. The US soybean oil market was affected by pessimistic expectations of the biodiesel policy and declined continuously. Palm oil lacked marginal positive factors. As a result, the entire vegetable oil and oilseed sector was under pressure. Palm oil started a continuous decline after reaching a previous high due to the lack of marginal positive factors. During this period, US soybean oil and crude oil also adjusted significantly. Concerns about the decline in export demand from Malaysia and Indonesia, doubts about whether B40 could be fully implemented, and the possibility that the tax increase associated with B40 might fall short of expectations led investors to view the subsequent driving forces of palm oil with caution [7]. - **Second Stage (Early February - End of March 2025)**: The USDA report at the beginning of the year was unexpectedly positive, leading to a continuous rise in US soybeans. The pessimistic expectations of the US soybean oil biodiesel policy were fully priced in. The cold wave problem in US fuel made US soybean oil temporarily strong. Additionally, the short - term import restrictions on raw materials only provided emotional support to US soybean oil, laying the foundation for the rise in February. After the Spring Festival, soybean oil showed strong momentum, supported by import costs due to slow harvesting in Brazil, unfavorable weather in Argentina, low soybean arrivals in China in the first quarter, and tight near - term supply. The MPOB supply - demand data showed that Malaysia's palm oil production in January was significantly lower than expected, and production in February was also expected to remain low, with inventory difficult to improve. Combined with the upcoming Ramadan, palm oil had strong fundamental support among vegetable oil varieties. At the same time, rumors of an export ban in the producing areas stimulated palm oil to move strongly due to supply concerns. In March, China's 10% tariff increase on US soybeans stirred market sentiment. The potential for the US - Europe tariff tension to prompt Europe to shift its procurement of soybean - related products to South America might lead to an increase in the potential import cost of soybean oil, causing vegetable oils to maintain a relatively strong pattern in a volatile market [8]. - **Third Stage (April - Mid - June 2025)**: Palm oil fluctuated between strong current reality and weak expectations, and the market had significant differences on when the inflection point would arrive, leading to intense long - short battles. During the Tomb - Sweeping Festival, the US reciprocal tariff policy had a systematic impact on the global financial market, causing international oil prices to decline sharply, and the three major vegetable oils followed suit. After the market sentiment stabilized, palm oil traded the recovery of supply and export pressure, and the vegetable oil market entered a bottom - building phase, waiting for new contradictions in the third quarter [9]. - **Fourth Stage (Late June - Early October 2025)**: Driven by both domestic and international factors, vegetable oil varieties started the first smooth upward trend this year, with palm oil rising by 2,000 points. On the demand side, the negative factors such as the cumulative year - on - year decline in apparent demand in China and India, negative growth in European diesel consumption, and cumulative year - on - year decline in US biodiesel production did not support short - selling vegetable oils in the second half of the year. On the supply side, since the second quarter, the market's pessimistic sentiment about Malaysia's palm oil inventory reaching a high of over 2.3 million tons this year has gradually subsided. The high production from April to May released the negative factors in advance. Coupled with the potential production risks during the high - production period from July to August, the price of palm oil reached its low point earlier. Internationally, the positive news of the US RVO policy in mid - June injected upward momentum into the vegetable oil sector. The increase in European carbon targets and changes in the double - carbon ticket rules led to an upward trend in HVO prices since the end of June. Meanwhile, geopolitical risks in the Middle East boosted oil prices, and the European diesel crack spread reached a historical high. Driven by both domestic and international factors, palm oil started a two - month upward trend, rising by 2,000 points. Subsequently, from September to mid - October, palm oil oscillated in a very narrow range between 9,200 and 9,600, waiting for further guidance during the low - production season [10]. - **Fifth Stage (Mid - October 2025 - Present)**: The US biodiesel policy has been delayed, and palm oil maintained high - yield power in the fourth quarter. The trading momentum of the strong expectations under the weak reality was difficult to sustain. US soybean oil gradually fell back to the platform on June 13, and the de - stocking time of Malaysian palm oil was repeatedly postponed. Palm oil prices completely gave back the gains since June, falling back to the price platform in June, creating the second smooth downward trend this year. However, this round of decline was entirely caused by the unexpected over - production of palm oil itself. Soybean oil prices were still supported by the slow ship - buying under the China - US economic and trade relations and the logic of crushing profit repair. Therefore, the soybean - palm oil price spread rebounded significantly during this period, rising by nearly 1,000 points; rapeseed oil gradually gave back the premium caused by the China - Canada policy disturbance, and the rapeseed - soybean oil price spread also declined by about 500 points [11]. 2. Outlook for the Supply Side of Vegetable Oils in 2026 - **Overall Supply and Demand**: In the 25/26 season, the global production of the four major vegetable oils is expected to increase by about 4 million tons to 210 million tons, with the growth rate slowing down compared to the previous two seasons. The global production of soybean oil is expected to increase by 1.5 million tons, palm oil by 1.8 million tons, rapeseed oil by 0.4 million tons, and sunflower oil to remain flat year - on - year. The global consumption of the four major vegetable oils is expected to increase by about 5.5 million tons to 209 million tons, recovering from the negative growth in the 24/25 season. This is mainly due to the recovery of India's vegetable oil consumption, the implementation of PSO - B50 in Indonesia in the second half of the year, the full - year plan of B15 in Brazil, and the rebound of the US biodiesel policy. As a result, the global industrial demand is expected to increase by 4.4 million tons year - on - year, including a 1.2 - million - ton increase in palm oil, a 2 - million - ton increase in soybean oil, and an 0.8 - million - ton increase in rapeseed oil. The global ending inventory of the four major vegetable oils is expected to increase by 1 million tons to 25.65 million tons, and the inventory - to - sales ratio is expected to rise from 12.22% in the previous season to 12.25%. However, the main inventory increase is contributed by palm oil, while soybean, rapeseed, and sunflower oils remain in tight balance. The rapid inventory accumulation period of palm oil has been fully priced in the fourth quarter of 2025, and the pressure of vegetable oil inventory reconstruction has been released in advance [19][20]. - **Palm Oil** - **Malaysia**: From January to November 2025, Malaysia's cumulative palm oil production increased by 3.37% year - on - year, and the full - year production is expected to approach 20.2 million tons, an increase of about 0.85 million tons compared to 2024. The continuous high production in the past two years has not only led to a decline in palm oil prices in the fourth quarter but also raised concerns about the supply inflection point. The high production in October and November may be due to less rainfall, the development of mechanized operations, and the increase in foreign labor. Based on the current tree - age structure and historical rainfall conditions, the production potential in 2026 is expected to decline slightly compared to 2025, but considering the positive impact of labor on production, the production in 2026 is estimated to be in the range of 19.6 - 19.8 million tons. Attention should be paid to the possible low - production situation from March to May next year [27][28][30]. - **Indonesia**: From January to September 2025, Indonesia's cumulative palm oil production was 43.33 million tons, an increase of 11% year - on - year, with an increase of 4.55 million tons in the first three quarters. The full - year production is estimated to be about 57.5 million tons, an increase of 4.8 million tons year - on - year. For the production in 2026, two main factors need to be considered: the improvement of the tree - age structure and the production capacity release cycle due to the increase in the planted area in the early stage, and the impact of the transfer of 3 million hectares of illegal plantations to state - owned companies on the unit yield. Overall, the production in 2026 is expected to increase to 58.68 million tons in the GAPKI statistics. However, the relatively dry weather in July this year may lead to lower - than - expected production from April to May next year [39][40][43]. - **Soybean Oil**: In the 25/26 season, the global soybean oil production is expected to increase to 71.27 million tons, an increase of 1.46 million tons compared to the previous season, with a significantly slowed growth rate. The global soybean production in the 25/26 season has a small increase compared to the previous year. Except for the United States, the increase in soybean crushing volume in other countries is not significant. The United States' soybean crushing capacity has an average annual growth rate of about 3 - 5% in recent years. Under the background of high crushing profits and high operating rates, the crushing volume in the 25/26 season is expected to increase by 3 - 4 million tons, and the production of soybean oil is expected to increase by about 0.65 million tons. In Brazil, with the significantly higher old - crop soybean inventory compared to the same period last year, the crushing volume is expected to increase by more than 1 million tons, corresponding to an increase of 0.2 million tons in soybean oil production. Argentina's production is slightly reduced, and China's soybean oil production is expected to increase by 0.6 million tons in the 25/26 season due to the high supply of raw materials and the high cost - effectiveness of soybean oil. The global demand for soybean oil in the 25/26 season is expected to increase to 70.99 million tons, an increase of 2.29 million tons compared to the previous season, higher than the production increase. The change in the US biofuel policy has a great impact on the industrial demand for US soybean oil next year. The difference between the most pessimistic and the most optimistic scenarios is as high as 2 million tons. Even in the most pessimistic scenario, the US demand for soybean oil in the 25/26 season will increase by at least 1.4 million tons to 13.6 million tons, including 7.1 million tons of industrial consumption. The final global ending inventory of soybean oil is expected to increase by 0.28 million tons, and the inventory - to - sales ratio will only slightly increase from 10.34% in the previous season to 10.40%. In the continuation of the soybean bear market, soybean oil first regains demand through price adjustment, greatly weakening the contradiction of inventory accumulation at the margin [55][56]. - **Rapeseed and Sunflower Oil** - **Rapeseed**: In the 2025/26 season, the global rapeseed production is expected to increase significantly year - on - year, and the global rapeseed supply is expected to become looser. According to the USDA's November forecast, the global rapeseed production in the 2025/26 season will increase by 6.27 million tons compared to the 2024/25 season. The rapeseed production in the EU, the main consumer region, is expected to increase by more than 3 million tons year - on - year. Among the main exporting countries, except for Ukraine, the production of other major exporting countries will increase. However, the beginning inventory of rapeseed in the main exporting countries has decreased significantly year - on - year, and the supply pressure of global rapeseed is expected to be postponed. The effective supply (beginning inventory + production) of global rapeseed in the 2025/26 season will increase by 4.15 million tons year - on - year, with an increase rate of 4.2% [65][66]. - **Sunflower Oil**: The production and crushing estimates of sunflower seeds in the EU, Russia, and Ukraine have been revised down again, suppressing the growth of global sunflower oil production this season. The current forecast for global sunflower oil production in the 25/26 season is about 21 million tons, and the year - on - year production increase has shrunk from the initial 2 million tons to almost zero. The sunflower oil supply in Europe, Russia, and Ukraine is much lower than expected, in contrast to the increasing production in Argentina. From January to October 2025, Argentina's sunflower oil exports increased by 30% year - on - year to a multi - year high of 1.36 million tons, and its market share in multiple importing countries has continued to expand. Argentina's sunflower oil exports are expected to further increase in 2026, although recent rainfall has hindered local production by about 0.4 million tons. Affected by this, the price of sunflower oil for near - month delivery remains strong and maintains a premium over other major vegetable oils in the European market [67][68]. 3. Outlook for the Demand Side of Vegetable Oils in 2026 - **China**: In terms of total demand, the domestic consumption of vegetable oils has not shown a counter - trend increase. From January to October 2025, the cumulative apparent consumption of the four major vegetable oils in China was 22.755 million tons, a decrease of 1.38 million tons compared to the same period last year, with an average monthly decrease of 0.14 million tons. In terms of variety structure, soybean oil's demand share has further increased due to its cost - effectiveness. From January to October 2025, the cumulative apparent consumption of domestic soybean oil was 16.94 million tons, an increase of 0.61 million tons compared to the same period last year, and the monthly average share rose to over 70%. The cumulative apparent consumption of palm oil was 2.42 million tons, a decrease of 1 million tons compared to the same period last year, and the monthly average share fell to below 15%. The cumulative apparent consumption of rapeseed oil was 2.9 million tons, a decrease of 0.42 million tons compared to the same period last year, and the monthly average share fell to below 15%. The cumulative apparent consumption of sunflower oil was 0.47 million tons, a decrease of 0.06 million tons compared to the same period last year, and the monthly average share remained at 2 - 3%. The annual apparent demand for soybean oil exceeded 20 million tons (20.4 million tons in the 24/25 season) and is expected to further increase to 20.7 million tons in the 25/26 season. The palm oil consumption in China is expected to remain flat year - on - year, with an estimated annual demand of about 3.15 million tons. The demand for rapeseed oil in China is expected to continue to decline to about 3.4 million tons in the 25/26 season. Overall, the demand for the four major vegetable oils in China decreased by 1.3 million tons to 28.1 million tons in the 24/25 season and is expected to further decline to 27.8 million tons in the 25/26 season [72][73][75]. - **India**: From January to October 2025, India's cumulative imports of edible vegetable oils were 13.07 million tons, a decrease of 0.35 million tons compared to the same period last year. Among them, palm oil imports were 6

Core Viewpoint - The September supply and demand report from the Malaysian Palm Oil Board (MPOB) presents a bearish outlook for palm oil, with production declining and inventory levels unexpectedly increasing, leading to a price correction in palm oil futures [1][2]. Group 1: Supply and Demand Dynamics - Malaysian palm oil production in September decreased by 0.73% month-on-month to 1.84 million tons due to rainy weather and holiday impacts [1]. - Exports increased by 7.69% month-on-month to 1.43 million tons, driven by Indonesia's tariff adjustments [1]. - Despite the increase in exports, domestic biodiesel consumption has declined, and rising imports have led to a lower-than-expected apparent consumption, resulting in an increase in inventory levels [1][2]. Group 2: Future Production and Inventory Expectations - In October, Malaysian palm oil production is expected to rise by 6% month-on-month to 1.95 million tons, significantly higher than historical averages [2]. - However, the export growth is slowing, with estimates for October exports ranging between 1.47 million to 1.48 million tons, and inventories are projected to exceed 2.4 million tons by the end of October [2]. Group 3: Market Trends and External Influences - Domestic palm oil procurement remains active, particularly for shipments in November and December, but terminal demand is weak due to the price gap between soybean oil and palm oil [3]. - India's palm oil purchasing has slowed down, with a shift towards soybean and sunflower oil due to reduced export tariffs from Argentina, leading to a decrease in palm oil market share in India [3][6]. - The overall market sentiment is bearish, driven by declining demand expectations for biodiesel and edible oil exports, alongside better-than-expected production in major producing regions [8]. Group 4: Policy and Economic Considerations - Indonesia's B50 biodiesel policy is set to be implemented in the second half of 2026, with expected biodiesel distribution increasing significantly, but there are concerns about inflation and funding shortages [4]. - The palm oil fund is projected to have a balance of $2.4 billion by the end of 2023, but this is expected to decline significantly by the end of 2025 due to rising subsidy costs [5].

Group 1: Report Core View - The global oil and fat market shows complex supply - demand dynamics in the 25/26 period. Despite an increase in global oil and fat production, the recovery of export and biodiesel demand since the second half of this year, along with palm oil supply issues, supports price increases. The supply of Malaysia and Indonesia is differentiated, with Malaysia's production possibly peaking in August while Indonesia's production recovers and inventory builds up. Global new - crop sunflower oil prices are not as weak as expected due to harvest delays and slow pressing growth. South American soybean oil has passed its export peak and has poor pressing profits. The rapeseed oil market is affected by policies, especially China - Canada relations. The trend - down of oil and fat prices may occur only if the palm oil production - reduction season in Malaysia and Indonesia is not obvious and the global biodiesel development slows down [195]. Group 2: Global Oilseeds and Oils Overview Production - Rapeseed production has been continuously adjusted upwards, while sunflower seed production has been continuously adjusted downwards. In the 25/26 period, the production of some oilseeds is expected to change, with rapeseed showing an upward trend and sunflower seed a downward one [8]. - The production of rapeseed oil and palm oil has been continuously adjusted upwards, while sunflower oil production has been continuously adjusted downwards [29]. Export - Rapeseed export has been continuously adjusted upwards, sunflower seed export has been adjusted downwards multiple times, and soybean export has been recently adjusted upwards [15]. - The export of rapeseed oil, sunflower oil, and soybean oil has been continuously adjusted downwards, while palm oil export has been continuously adjusted upwards [35]. Pressing - Rapeseed pressing has been continuously adjusted upwards, while soybean and sunflower seed pressing have been continuously adjusted downwards [21]. Inventory - Soybean and sunflower seed inventories are decreasing, while rapeseed inventory is increasing [23]. - The global oil and fat inventory - to - consumption ratio is slightly decreasing in the 25/26 period [38]. Group 3: Palm Oil Malaysia - Rainfall in Peninsular Malaysia has been relatively good this year. From May, Malaysia's palm oil production has been below the average level for four consecutive months. In August, the production decreased by 2.05% year - on - year. The export in August increased by 1.19% month - on - month to 1.32 million tons, and the cumulative export from January to August decreased by 10.80% year - on - year. The apparent consumption in August reached 490,000 tons, a record high. The inventory increased to 2.2 million tons. In September, there is a high possibility of production reduction, and the inventory build - up at the end of September may be limited [42][45][48][52]. Indonesia - In June, Indonesia's palm oil production increased by 15.99% month - on - month to 5.289 million tons, and the cumulative production from January to June was 27.89 million tons, 1.71 million tons more than the same period in 2024. The export in June increased by 35.56% month - on - month to 3.606 million tons. From July, production recovered again, and inventory began to build up. In August, production continued to recover, especially in the second half of August. Usually, the average production increase in September is the largest, but in 2025, due to precipitation and other factors, the actual increase may not reach the historical average of 5.43%. The inventory will continue to build up at the end of September, but the recovery will not be fast [60][68]. Group 4: Rapeseed EU - In August, the EU raised rapeseed production by 300,000 tons to 18.84 million tons, with the planting area remaining at 5.81 million hectares and the yield per hectare increasing to 3.24 tons, a 2.15 - million - ton increase compared to the previous crop [75]. Canada - In August, Canada officially raised the 24/25 rapeseed production from 19.19 million tons to 20.1 million tons, with the planting area remaining at 8.68 million hectares and the yield per hectare increasing from 2.08 tons to 2.35 tons. Exports were raised from 6 million tons to 7 million tons, domestic consumption from 11.5 million tons to 12.18 million tons, and the ending inventory was 2.2 million tons, slightly higher than the previous crop's 1.18 million tons [77]. Australia - Australia's 25/26 rapeseed production is 5.71 million tons, lower than the previous crop's 6.1 million tons, with both the planting area and yield per hectare decreasing. The harvest area is 3.379 million hectares, and the yield per hectare is 1.7 tons. Exports are 4.14 million tons, slightly higher than the previous crop's 4.1 million tons. The rapeseed is currently in the growing season and will enter the harvesting period in October [83]. Russia and Ukraine - Russia's 2025 total rapeseed production is expected to reach 5 million tons, higher than last year's 4.66 million tons. Ukraine's rapeseed production is estimated to be 3.5 million tons due to a decrease in the planting area and unfavorable weather during the growing season [87]. Group 5: Soybean Oil Brazil - In August, Brazil's soybean oil export was 160,000 tons, higher than July's 138,000 tons but lower than June's 167,000 tons. The cumulative export from January to August was 1.11 million tons, higher than the same period in 2024 [89]. Argentina - In August, Argentina's soybean oil export was 545,000 tons, lower than July's 569,000 tons. The cumulative export from January to July was 4.14 million tons, higher than the same period in 2024. The export growth rate of both Brazil and Argentina's soybean oil is slowing down [92]. USA - In July, the US exported 28,500 tons of soybean oil. The inventory and consumption data also show certain trends, but specific details are presented in the relevant charts [101]. Group 6: India - As of September 16, the price differences between different oils in India have changed. The import, inventory, and consumption of various oils also show different trends. For example, the import of palm oil, soybean oil, and sunflower oil has specific data changes over time, and the consumption of these oils also varies monthly [111][115][126]. Group 7: Biodiesel Indonesia - In the first half of 2025, Indonesia distributed 7.96 billion liters of biodiesel, completing 51% of the 2025 target of 15.6 billion liters, which supports the demand for palm oil [132]. EU - The EU's RME processing profit is average, and the import and export of biodiesel are decreasing. The import of UCO from China is at a high level, and the import of raw materials from Malaysia and Indonesia also shows certain trends [133][135][137]. USA - In June, the proportion of soybean oil in biodiesel feedstock reached 36%, rising for several consecutive months. The proportion of animal fat and waste oils remained high, and the proportion of Canadian rapeseed oil decreased to 8%. The import of various raw materials also shows specific data changes [144][146]. Brazil - On June 25, Brazil officially approved increasing the biodiesel blending ratio in diesel from 14% to 15% (B15) starting from August 1, and plans to reach 16% (B16) in March 2026 and 17% (B17) in March 2027, with a final target of 25% (B25) [162]. Group 8: Domestic Market Supply - The domestic soybean and rapeseed crushing volumes, as well as the import volumes of soybeans, rapeseed, and palm oil, show specific data changes over time. The spot price differences between different oils are affected by factors such as taxes and import volumes [167][169][171][182]. Inventory - The inventory of domestic edible palm oil, sunflower oil, and other oils, as well as the total inventory of the four major oils, show certain trends over time [184]. Transaction - The downstream purchases more soybean oil, especially the forward basis. The spot transaction of palm oil remains at a low level, and the domestic rapeseed oil transaction slows down after the sellable quantity of oil mills decreases [191]. Balance Sheet - The monthly balance sheet of domestic oils shows the changes in inventory, production, import, demand, and other aspects over time [194].

Core Viewpoint - The palm oil market in Indonesia is currently strong ahead of the Diwali festival, driven by increased import demand from India and support from biodiesel demand in Indonesia [1] Group 1: Market Dynamics - Increased oilseed consumption in India is expected as the Diwali festival approaches, leading to higher palm oil imports [1] - South American soybean oil exports are anticipated to slow down, increasing reliance on palm oil [1] - The biodiesel demand in Indonesia is providing additional support to the palm oil market [1] Group 2: Future Outlook - The U.S. biodiesel compliance obligations for 2026 and 2027 are expected to be finalized by November, with current market expectations of a decrease in import raw material subsidies [1] - Palm oil prices are not likely to drop significantly before the establishment of Indonesian inventories, with a gradual upward movement in price bottoms [1] - However, sustained price increases will depend on continued purchases from demand countries like India [1] Group 3: Competitive Landscape - The 2025/26 sunflower seed production is expected to increase, leading to higher sunflower oil exports [1] - Sunflower oil from the Black Sea region is set to enter the market in September, creating competition for palm oil [1] - After the Diwali festival in September and October, palm oil import demand from India is expected to decline, potentially leading to weaker demand and a market turning point due to high inventories in Malaysia and Indonesia [1]

Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - The 2025/2026 annual level is a year of increasing supply and demand for oils and fats, making it difficult to have significant supply - demand changes. However, there are usually monthly - level market trends. It may fluctuate downward from June to August due to possible inventory reduction of palm oil in the producing areas but sufficient inventory accumulation expectations in September and October. After October, the implementation of Indonesia's B50 policy and the US biodiesel policy, combined with seasonal palm oil production cuts, may lead to an increase [1][23]. Summary by Related Chapters I. Southeast Asian Palm Oil Production Recovery Suppresses Oil Prices - Since March 2025, the trend of oils and fats has diverged. Palm oil has generally declined due to increased production, while rapeseed oil has fluctuated at a high level due to tight Canadian rapeseed supply. Recently, the overall valuation has been lifted due to the EPA's RVO draft. From March to April, the combined production of CPO + CPKO in Indonesia and CPO in Malaysia was 619.5 and 659.6 million tons respectively, an increase of 90 million tons year - on - year. Although export performance was average during the same period, domestic consumption in the producing areas remained at a high level, so the increase in inventory was limited, and the inventory rose to a relatively low level in recent years by the end of April [3]. - Looking ahead to the next three months in palm oil producing areas, the seasonal production from June to August usually runs steadily, reaches a high in September and October, and gradually declines from November. Since the beginning of this year, domestic consumption in the producing areas has been good, mainly due to the increase in biodiesel usage and a slight increase in edible consumption, which may also maintain a good level from June to August and may increase seasonally after September. It is estimated that the average monthly production from June to September in the producing areas will be 600 - 630 million tons, the average monthly domestic consumption will be about 240 million tons, and the average monthly export volume will be 360 - 390 million tons [1][3]. II. Palm Oil in Malaysia + Indonesia May See a Slight Inventory Reduction from June to September and Enter the Inventory Accumulation Stage after September - Palm oil exports usually increase seasonally from June to October. From January to May 2025, the combined imports of palm oil and palm kernel oil by China and India decreased by about 134 million tons year - on - year, resulting in low domestic oil inventories in India, which may require more palm oil imports to replenish inventory later. Imports from other countries except China and India increased by about 50 million tons. The apparent demand for vegetable oils was slightly weak. India's imported vegetable oil consumption has recently remained at about 120 million tons per month, showing a slight decline. In China, from January to May, among vegetable oil consumption, soybean oil consumption decreased by about 30 million tons year - on - year, rapeseed oil consumption remained flat, and the apparent consumption of palm oil decreased significantly by about 50 million tons. It is estimated that China and India's palm oil imports from June to September will be slightly higher than last year, with an average monthly import of about 110 million tons [11][13]. - In terms of other oils, the exports of soybean oil from Argentina and Brazil are expected to be the same as last year. Due to the increase in domestic consumption in Brazil affected by B15, but with an additional 300 million tons of soybean crushing this year, the export volume is expected to remain at last year's level. Argentina's crushing and exportable volume are usually relatively stable. Ukraine's sunflower oil exports are in a seasonal decline stage. Therefore, before the oilseed harvest season, global palm oil may partially fill the reduction in other oil exports [13]. - Assuming that the global palm oil import demand from other countries except China and India from June to September is about 300 million tons per month on average over the years, the average monthly global palm oil import demand from June to September is expected to be 410 million tons, and the palm oil inventory in the producing areas is expected to remain stable or see a slight reduction. However, the inventory reduction scenario is limited to a decline in palm oil production in the producing areas. If downstream buying interest remains weak under new situations such as macro - fluctuations and trade wars, the inventory reduction in the producing areas will also be tested. After September, production in the producing areas will further increase, and with the harvest of other oilseeds, the palm oil in the producing areas will enter the inventory accumulation process [13][14]. III. It is Difficult to Have Significant Supply - Demand Changes in Oils and Fats at the Annual Level - Currently, the new - crop Canadian rapeseed, rapeseed and sunflower seeds in Russia and Ukraine, and Australian rapeseed are in the growing stage. The weather for Canadian rapeseed has improved recently after being dry in the early stage. The weather in the sunflower seed - producing areas in Russia and Ukraine is normal. The EU's rapeseed and sunflower seeds are expected to have a restorative increase in production according to the EU report on June 25. Global soybeans are expected to have a bumper harvest, and the soybean oil crushing production is expected to increase by 200 million tons year - on - year. Overall, other oils except palm oil are expected to have a combined production increase of 400 - 450 million tons in the 2025/2026 global annual level, with sufficient global oil supply [22]. - On the demand side, the US biodiesel blending draft is expected to bring an incremental industrial demand of about 150 - 200 million tons of oils and fats globally. Brazil's B15 policy may provide an incremental demand of about 50 million tons. Global edible demand is weak under the negative impact of the trade war on the macro - economy, and the annual increase is expected to be less than 250 million tons under normal circumstances. For palm oil, due to good rainfall in 2024, there may be a certain increase in production at the annual level, but the increase is limited due to the relatively old tree age [22].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - According to the USDA June report, in the 25/26 period, there will be significant increases in the production of global soybeans, rapeseed, and sunflower seeds. The export volume of soybeans will increase the most, and the crushing volume of soybeans, rapeseed, and sunflower seeds will also rise. In the 24/25 period, the stock-to-use ratios of global rapeseed and peanuts will increase, while those of soybeans and sunflower seeds will decline. Among the four major global oils and fats in the 25/26 period, the production of soybean oil, palm oil, and sunflower oil will increase significantly, with a small increase in rapeseed oil [4][8][11][15][18]. - In the 24/25 period, the global production of oils and fats will increase by 6.5 million tons to 235 million tons. Edible consumption will increase by 4.3 million tons to 164 million tons, and industrial consumption will increase by 1.02 million tons to 65.16 million tons. The total supply increment is less than the consumption increment, leading to a decline in the ending inventory and stock-to-use ratio in the 25/26 period. In the 25/26 period, the production growth rate is slightly higher than the consumption growth rate, and the industrial consumption growth rate is lower than the edible consumption growth rate [33][35][36]. - In the 2025 - 26 period, the planned rapeseed sown area in Canada will be 8.8 million hectares, slightly lower than the five - year average. The production is expected to be 18 million tons, and the supply is expected to be 19.4 million tons, a 6% year - on - year decrease. The rapeseed crushing volume is expected to decrease slightly to 11 million tons, and exports are expected to drop to a four - year low, while the inventory is expected to reach 2 million tons. In the EU, the rapeseed yield per unit area has been revised downwards again. In Australia, the rapeseed sown area is expected to decrease by 1% to 3.4 million hectares, and the production is expected to decline by 6% to 5.7 million tons. The yield per unit area is revised down to 1.69 tons per hectare. In the 25/26 period, the rapeseed production in Russia will be 4.5 - 4.7 million tons, and in Ukraine, it will drop from 3.7 million tons to 3.4 million tons. The total production of rapeseed in the EU, Canada, Australia, Russia, and Ukraine will reach 50.02 million tons, slightly higher than that in 2024 [41][42][46][50][55]. - The production of Malaysian palm oil is slightly higher than expected, with increases in Sarawak, Sabah, and Peninsular Malaysia. The export in May exceeded expectations. The production of Indonesian palm oil in March increased by 16.02% month - on - month, and exports increased by 2.68% month - on - month. In March, Indonesia started implementing the B40 biodiesel policy, and the palm oil consumption reached a record high for the same period. As of April 24, the biodiesel consumption in Indonesia this year was 4.44 billion liters. The Indonesian Ministry of Energy and Mineral Resources requires the implementation of B50 biodiesel in early 2026, but there is a need to increase production capacity [61][66][67][72]. - The soybean - palm oil price spread in India first declined and then rebounded. The soybean crushing profit in South America has deteriorated, and the export of South American soybean oil will significantly decrease after July. The front - end trading of palm oil supply pressure is basically over, and the subsequent rebound amplitude will be determined by the degree of demand improvement and crude oil prices [97][201]. - The actual domestic production capacity of the US soybean crushing industry has increased from about 2.23 billion bushels per year in early 2023 to about 2.55 billion bushels per year in early 2025, a 14% increase. If the unannounced expansion plans are realized, the total production will increase to over 2.78 billion bushels per year by 2030. The USDA June report shows that the US soybean crushing volume in the 24/25 period is 2.42 billion bushels, and in the 25/26 period, it is 2.49 billion bushels [161]. - Due to the geopolitical conflict, the strength of US crude oil has driven up the price of oils and fats. The increase in the production of new - crop rapeseed globally in the 25/26 period is limited, and the domestic rapeseed oil in the near - term remains strong. The South American soybean crushing profit has deteriorated, and the export of South American soybean oil will decline significantly after July. If the US biodiesel RVO is lower than expected, it is advisable to buy on dips after the correction of domestic oils and fats. After September, as the new - crop rapeseed and sunflower oil are listed, the price of oils and fats may enter a weak and volatile state [201]. Summary by Related Catalogs Oilseeds - **Production**: In the 25/26 period, the production of global soybeans, rapeseed, and sunflower seeds will increase significantly. In the 24/25 period, the stock - to - use ratios of global rapeseed and peanuts will increase, while those of soybeans and sunflower seeds will decline [4][15]. - **Export**: In the 25/26 period, the export volume of soybeans will increase the most [8]. - **Crushing**: In the 25/26 period, the crushing volume of global soybeans, rapeseed, and sunflower seeds will increase [11]. Oils and Fats - **Production**: In the 24/25 period, the global production of oils and fats will increase by 6.5 million tons to 235 million tons. In the 25/26 period, the production of soybean oil, palm oil, and sunflower oil will increase significantly, with a small increase in rapeseed oil [18][33]. - **Consumption**: Edible consumption will increase by 4.3 million tons to 164 million tons, and industrial consumption will increase by 1.02 million tons to 65.16 million tons in the 24/25 period. The industrial consumption growth rate is lower than the edible consumption growth rate in the 25/26 period [33][36]. - **Inventory and Stock - to - Use Ratio**: The total supply increment is less than the consumption increment, leading to a decline in the ending inventory and stock - to - use ratio in the 25/26 period [33]. Rapeseed - **Canada**: In the 2025 - 26 period, the planned rapeseed sown area will be 8.8 million hectares, slightly lower than the five - year average. The production is expected to be 18 million tons, and the supply is expected to be 19.4 million tons, a 6% year - on - year decrease. The crushing volume is expected to decrease slightly to 11 million tons, exports are expected to drop to a four - year low, and the inventory is expected to reach 2 million tons [41]. - **EU**: The rapeseed yield per unit area has been revised downwards again [42]. - **Australia**: The rapeseed sown area is expected to decrease by 1% to 3.4 million hectares, and the production is expected to decline by 6% to 5.7 million tons. The yield per unit area is revised down to 1.69 tons per hectare [46][50]. - **Russia and Ukraine**: In the 25/26 period, the rapeseed production in Russia will be 4.5 - 4.7 million tons, and in Ukraine, it will drop from 3.7 million tons to 3.4 million tons [55]. Palm Oil - **Malaysia**: The production is slightly higher than expected, with increases in Sarawak, Sabah, and Peninsular Malaysia. The export in May exceeded expectations [61]. - **Indonesia**: The production in March increased by 16.02% month - on - month, and exports increased by 2.68% month - on - month. In March, Indonesia started implementing the B40 biodiesel policy, and the palm oil consumption reached a record high for the same period [66][67]. India The soybean - palm oil price spread first declined and then rebounded [97]. US - **Soybean Crushing**: The actual domestic production capacity of the soybean crushing industry has increased from about 2.23 billion bushels per year in early 2023 to about 2.55 billion bushels per year in early 2025, a 14% increase. The USDA June report shows that the US soybean crushing volume in the 24/25 period is 2.42 billion bushels, and in the 25/26 period, it is 2.49 billion bushels [161]. - **Biodiesel**: The US biodiesel RVO is still in the proposal stage. The final RVO quantity may be lower than the proposal. Whether imported raw materials are used or not, the consumption of US soybean oil will increase, but the export supply of US soybean oil to the world will decrease [201]. Domestic Oils and Fats Due to the geopolitical conflict, the strength of US crude oil has driven up the price of oils and fats. The increase in the production of new - crop rapeseed globally in the 25/26 period is limited, and the domestic rapeseed oil in the near - term remains strong. If the US biodiesel RVO is lower than expected, it is advisable to buy on dips after the correction of domestic oils and fats. After September, as the new - crop rapeseed and sunflower oil are listed, the price of oils and fats may enter a weak and volatile state [201].

1. Report Industry Investment Rating There is no information provided in the content about the report industry investment rating. 2. Core Viewpoints of the Report - The current situation of the oil and fat market is characterized by weak reality and strong expectations, with potential bullish drivers in both production and demand in the second half of the year. The US biodiesel policy injects upward momentum into the entire oil and fat sector [2]. - Before the fourth quarter, it is advisable to go long on palm oil and rapeseed oil at low levels, and consider going long on soybean oil as appropriate. For US soybean oil, it is recommended to configure it by going long on the US oil - meal ratio, while closely monitoring any policy changes in the US biodiesel sector and the resumption rhythm of oilseeds and oils production [2]. - When the US biodiesel policy impacts the global oil and fat demand pattern again, the results of the RVO final case announcement and subsequent subsidy plans have become the most important leading factors for the oil and fat market. Wait for the rulings of the 45Z and RFS models on imported raw materials to guide the price differences between different oils and the opening of the upward space for US soybean oil [3]. 3. Summary According to the Table of Contents 3.1 2025 H1 Oil and Fat Market Review - **Phase 1 (Dec 2024 - Mid - late Jan 2025)**: The supply pressure of new Brazilian crops and the depreciation of the real led to a continuous decline in Brazilian soybean discounts. The US soybean oil futures were affected by the pessimistic expectations of the biodiesel policy, and the marginal bullish factors for palm oil were scarce. As a result, the entire oil and fat sector was under pressure [6]. - **Phase 2 (Early Feb - End of Mar 2025)**: The unexpected bullish USDA report at the beginning of the year, the full - fledged trading of the pessimistic expectations of the US soybean oil biodiesel policy, and the short - term strength of US soybean oil due to the cold wave in US fuel laid the foundation for the rise in February. After the Spring Festival, soybean oil was strong due to import cost support, and palm oil was strong due to low production and supply concerns [7]. - **Phase 3 (Apr - End of May 2025)**: Palm oil fluctuated between strong reality and weak expectations. The market was divided on the inflection point, and the multi - short game was intense. After the Qingming Festival, the three major oils followed the decline of international oil prices, and then entered a period of bottom - building and waiting for new contradictions [8]. - **Phase 4 (Jun 2025 - Present)**: Geopolitical risks in the Middle East boosted oil prices, and the positive news of the US RVO policy injected upward momentum into the oil and fat sector. US soybean oil regained independent upward pricing power on the demand side and drove up international oils, waiting for more resonance factors in the third quarter to determine the direction [8]. 3.2 2025 Oil and Fat Supply Outlook - **Overall Supply and Demand**: In the 24/25 period, the global supply of the four major oils is estimated to increase by about 2.53 million tons to 206 million tons, with a significant slowdown in growth compared to the previous two years. Consumption is expected to decrease by 1.9 million tons to 203 million tons. The ending inventory is expected to increase by 3 million tons to 27.71 million tons, and the stock - to - use ratio will rise from 12.06% to 13.64%. In the 25/26 period, the total production of the four major oils is expected to increase by 6.5 million tons, demand will increase by 4.8 million tons, and the ending inventory will continue to be rebuilt [17][18]. - **Palm Oil**: In 2025, the cumulative production of Malaysian palm oil from January to May increased by 0.17% year - on - year. The production in April and May exceeded expectations, challenging the view of yield decline due to aging trees. In June, production is expected to remain flat or slightly decrease. For the whole year, it is estimated that the production of Malaysian palm oil will be around 19.2 million tons, with a risk of lower production in July - August compared to last year. In Indonesia, production is expected to recover to 55.2 million tons in 2025, but there may be a risk of lower - than - expected production from June to July next year [23][24][27]. - **Soybean Oil**: In the 24/25 period, global soybean oil production will reach 68.38 million tons, an increase of 3.51 million tons year - on - year. Consumption is expected to increase by about 1.9 million tons, mainly in India and Brazil. The ending inventory is expected to increase by 1.66 million tons. In the 25/26 period, USDA estimates that global soybean oil production will increase by 2.4 million tons [47]. - **Rapeseed and Sunflower Oil**: In the 24/25 period, global rapeseed production is expected to decrease by 4.5 million tons to 85.26 million tons, and rapeseed oil production will decline by 0.6 million tons to 31.42 million tons. Global sunflower oil production is expected to decrease by 2.7 million tons. The ending inventory of rapeseed oil is expected to increase by 0.87 million tons, while that of sunflower oil will decrease by 0.6 million tons. In the 25/26 period, the production of rapeseed and sunflower seeds is expected to increase significantly year - on - year [50][52]. 3.3 2025 Oil and Fat Demand Outlook - **China**: From January to May 2025, the cumulative apparent consumption of the four major oils decreased by 0.9 million tons year - on - year. The demand share of soybean oil increased, while the consumption of palm oil and sunflower oil decreased significantly. It is estimated that the demand for the four major oils in China in 2025 will decrease by 3 million tons compared to last year [57]. - **India**: From January to May 2025, the cumulative import of edible vegetable oils decreased by 1.2 million tons year - on - year. The reasons for the lower - than - expected demand include high domestic vegetable oil prices, suppressed speculative demand, reduced wealth effect, and the substitution of small oils. It is estimated that the cumulative import of the three major oils in India in 2025 will decrease by 0.8 million tons year - on - year [68][69]. - **EU**: In the 24/25 period, the consumption of the four major oils in the EU is estimated to decrease by 1.05 million tons. The reduction in production and high prices have led to demand rationing. The actual demand is not good, affected by both biodiesel raw material demand and edible consumption [76][77]. - **Global Biodiesel Demand Outlook**: In 2025, the total global demand for biodiesel/HVO/SAF is estimated to decrease by 50,000 tons. In terms of raw materials, the increase in biodiesel - used soybean oil is almost zero, the increase in palm oil is 1.5 million tons, rapeseed oil decreases by 0.7 million tons, and the global use of UCO decreases by 0.7 million tons [80]. - **US**: In 2026, the proposed rules will significantly benefit the demand for US soybean oil. It is estimated that the industrial demand for US soybean oil will increase by about 1.4 million tons in the 25/26 period, and about 1.2 million tons of supply will be withdrawn from the international circulation of oils [84][86]. - **Indonesia**: The B40 policy is expected to increase demand by 1.4 million tons [80]. - **Brazil**: The strong diesel demand stimulates biodiesel production, and the B14 policy is expected to increase demand by 0.45 million tons [80]. 3.4 2025 Oil and Fat Inventory Changes and Market Outlook - In the 24/25 and 25/26 periods, the ending inventory of the four major global oils is expected to continue the process of rebuilding. However, if the US EPA's proposed rules for 2026 and 2027 are implemented as expected, it will increase the demand for US soybean oil and affect the global oil and fat market [18].

Core Viewpoint - The company is experiencing stable household consumption in Q1 2025, with strong growth in high-end products, while facing price competition in lower-end products [1][2] Group 1: Product Trends - In Q1 2025, household consumption remains stable, with fast growth in high-end products such as Hu Jihua peanut oil, Waipojiang small-pressed rapeseed oil, OLEA olive oil, corn oil, and sunflower oil [1] - Products primarily competing on price, like soybean oil, are affected by industry price competition [1] Group 2: Health Product Development - The "Fengyitang" health products will have multiple forms, including raw materials in rice, flour, and oil products, and ready-to-eat products like plant sterol soy milk [1] - The domestic market shows significant demand for health products, which generally have higher profit margins than regular grain and oil products, indicating potential for sales growth and profit contribution [1] Group 3: Marketing and Channel Strategy - The company focuses on specific target groups and channels for promoting "Fengyitang" health products, such as hospitals, rehabilitation centers, and elderly care institutions [2] - Collaborations with restaurants allow consumers to experience health products directly, fostering organic word-of-mouth promotion [2] - Positive feedback from trial products in employee cafeterias boosts confidence in the health product line [2]

Group 1: Market Trends and Product Performance - In Q1 2025, household consumption remained stable, with high-end products like Hu Jihua peanut oil and Ouwangxiang cold-pressed rapeseed oil showing rapid growth, while price-competitive products like soybean oil faced industry competition [2][3] - Domestic soybean supply is expected to improve as South American soybeans arrive in May, alleviating tight supply conditions [3] - The company is developing health-oriented products under the "Fengyitang" brand, leveraging traditional Chinese concepts and advanced processing technology [3][4] Group 2: Financial Performance and Taxation - The company's Q1 2025 tax rate is high due to increased total profits and varying tax rates among subsidiaries, with some high-tax subsidiaries profitable and others at a loss [4] - The outlook for the flour business in 2024 is cautious, with expected improvement due to stable and slightly rising wheat prices after a poor performance in 2023 [4] Group 3: Pricing and Supply Outlook - Palm oil prices are expected to stabilize or decrease due to recovering production and increased inventory, despite previous supply tightness [4] - The company anticipates that the gross margin for health products will be higher than that of regular grain and oil products, contributing to future sales growth and profit [3][4] Group 4: Marketing and Distribution Strategies - The marketing strategy for "Fengyitang" health products focuses on specific demographics and channels, including hospitals and rehabilitation centers, to enhance consumer experience and awareness [3] - Employee feedback from product trials in company cafeterias has been positive, indicating strong confidence in the health product line [3]