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MARKET DEVELOPMENT
China To Buy More Soyoil Before Strict Import Rule
calendar03-08-2004 | linkDow Jones | Share This Post:

SINGAPORE (Dow Jones)--Chinese importers are rushing to sign newcontracts to book soyoil cargoes from South America before the Chinesegovernment enforces a more stringent rule in October that analysts said isaimed at curbing soyoil imports.This latest regulation on edible oil quality, released last week,stipulates that only crude soyoil that is of an equivalent standard torefined soyoil will be allowed into the country after Oct. 1. This willeffectively end China's imports of crude soyoil, most of which comes fromSouth America and is processed into more profitable refined oil for salein domestic markets.Soyoil imports in the first six months of this year soared 170% fromthe same period last year, according to Chinese customs data last month.The total volume of these soyoil imports wasn't available, nor was abreakdown on the amount of refined versus crude soyoil.The new regulation calling for higher standards of edible oil willeffectively stop importers from buying crude soyoil from South Americaafter Oct. 1, analysts said.Domestic soy crushers, plagued by weak demand for feed and competingwith a flood of foreign soyoil, have been clamoring for more governmentefforts to curb excessive vegetable oil imports in the hope of raisingdomestic oil prices.China will probably import another 430,000 tons of soyoil in Augustand 340,000 tons in September, bringing total soyoil imports during Juneto September to 1.3 million tons, analysts said.The Hamburg-based German trade publication, Oil World, also said lastweek that soyoil prices were much firmer in the cash markets across SouthAmerica due to strong buying from China.