July 10, 2012

 

USDA ups China's rapeseed imports outlook

 

 

Noting a boost both from the imposition of one set of trade curbs, and the easing in another, US agriculture staff raised estimates for China's rapeseed imports.

 

USDA staff in Beijing hiked by 400,000 tonnes to 2.3 million tonnes their forecast for China's rapeseed imports in 2011-12.

 

And next season, imports will hit 2.5 million tonnes, 100,000 tonnes above the official USDA estimate. The figure is also bigger than estimates of two million tonnes from China's official CNGOIC crop think tank and from World Trade Atlas.

 

It also comes against a backdrop of tight world rapeseed supplies, following a series of disappointing European and Ukraine harvests, which is expected to see world inventories fall in 2012-13 for a third successive season.

 

The tightness has boosted prices, which in Paris stood at EUR517 (US$637) a tonne for August delivery, a 17-month high for a spot contract.

 

The Chinese import estimates reflected in part the impact of the country's easing of restrictions on imports of Canadian rapeseed, the rapeseed variant, of which buy-ins were curbed in 2009 for fear of spreading blackleg, a fungal disease.

 

However, the USDA bureau also flagged Beijing's decision earlier this year to ban imports of vegetable meals from India, following the alleged discovery in rapeseed meal of contamination with malachite green, a synthetic dye used to colour fabrics such as leather, silk and wool.

 

The suspension "is likely to push rapeseed imports to fill the meal demand gap", the bureau said. Indeed, China has no shortage of its own rapeseed crushing capacity, estimated at 50 million tonnes a year.

 

With China's annual rapeseed consumption at 15 million-16 million tonnes a year, "the current average utilisation rate remains very low".

 

The bureau also highlighted a boost to Chinese rapeseed demand from the formation of a "tentative [state] reserve" of three million tonnes of the oilseed. Overall, Beijing has authorised the purchase of five million tonnes of the oilseed in 2012-13 at CNY5,000 (US$794) a tonne.

 

Nonetheless, the upgraded import forecast was below that of Oil World last week, which pegged China's rapeseed imports in 2011-12 at 2.4 million tonnes, and "likely to rise" next season to 2.7 million tonnes, although "imports of three million tonnes cannot be ruled out"

 

"We expect that Chinese import demand for Canadian rapeseed will be particularly high until December, and it remains to be seen how aggressively China buys," Oil World said.

 

The German-based analysis group said that "China is to be seen as the biggest swing factor" in the rapeseed market.