July 20, 2007

Reduced rapeseed output in China boosts demand for imported edible oils

According to the Chinese government's latest data, rapeseed production in 2007 is estimated at 11.6 million tonnes, 0.4 million tonnes lower than previous estimates. Rapeseed harvested area, at 660,000 hectares, were lower than last year's 695,000 hectares.

Lately, more Chinese farmers have reportedly shifted towards planting other grains, which is seen to yield bigger profits. China's domestic output of edible oils may be affected as a result, as this had helped to boost imports of certain variety of edible oil.

From Oct 2006 to May 2007, China's cumulative soyoil import volume had risen to 1.5 million tonnes. Based on this figure, the Chinese government had revised its soyoil import estimates for 2006/07 to 1.85 million tonnes.

Meanwhile, traders attributed the rise in soyoil imports to the shift in demand away from palm oil. Since the beginning of this year, Chinese demand for imported palm oil has been moderated after prices of the oil recorded significant gains.